SOMA Living May 2025

FINANCIAL FOCUS HOW TO RESPOND TO TARIFFS The Trump Administration announced tariffs on international trade. While uncertainty surrounds the evolution of these policies, many agree that tariffs can increase inflation and spark financial market volatility. How should you respond as a consumer and an investor? AS A CONSUMER: Review your budget. To manage the stress of higher prices on cash flow, reduce costs by dining out less or canceling unused streaming services. Opt for cheaper alternatives, such as generic brands, and negotiate better deals with cable or internet providers. Build an emergency fund. Maintain a fund with three to six months’ worth of living expenses in a low-risk, liquid account. This enables you to handle unexpected costs, like medical bills or a new furnace, and cope with inflation-driven price hikes. Accelerate large purchases. Consider advancing purchases of items likely affected by tariffs, such as automobiles, smartphones, and computers, if your budget allows. AS AN INVESTOR: Diversify. Tariffs target industries differently—autos and electronics more than healthcare and pharmaceuticals. Instead of reacting with hasty trades, build a diverse portfolio with stocks, bonds, and other securities. Diversification provides defense against market volatility from tariffs and other factors, reducing potential losses from downturns. Follow a long-term strategy. Tariffs present a disruptive force, akin to wars or political upheaval. Successful investors maintain focus during such events instead of abandoning the market. While responsive portfolio adjustments may be necessary, a strategy aligned with risk tolerance, time horizon, and goals better equips you for market changes. Addressing tariffs thoughtfully clarifies your financial approach amid uncertainties.

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Gary T. Jones 973.821.4900 • g.jones@EdwardJones.com

With over 25 years of experience, I work with individuals and businesses to help you achieve your financial goals. As a longtime resident of SOMA, I am proud to serve the local community. To learn more about the content of this article or schedule an appointment to talk about your goals, please contact me in my Maplewood office.

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