A Steady Framework to Navigate a Turbulent Market
Tariffs, Volatility. Staying Focused on the Big Picture
In this update, Jason Ranallo explores how a steady, fact-aware framework can help investors navigate today’s turbulent market. From shifting trade policies to ongoing market turbulence, we talk through headlines and apply a disciplined, long-term perspective designed to keep you focused on what matters most: your financial goals.
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This discussion is with Vector advisor and COO Jason Ranallo.
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Transcript
(adapted for readability)
Last week, we shared a podcast titled Facts, Framework & Approach — a conversation designed to help bring clarity to how we consider new information related to markets, the economy, and financial planning.
This week, we’re building on that foundation with a slightly narrower focus.
Rather than providing a broad economic overview, we’re zooming in on a few recent headlines that have been making waves: tariffs, market volatility, and potential interest rate changes. These updates can feel both urgent and intimidating — but with the right perspective, they become manageable.
Our goal? To guide you through these stories using the Facts, Framework, and Approach model.
Not only will we offer our perspective on the latest headlines, but we’ll also demonstrate how this model helps us interpret new information in a consistent, thoughtful way. Our hope is that you’ll find the model portable — a tool you can apply across a variety of financial and economic situations.
A Quick Refresher: The Four Anchors of Our Framework
• Time Horizon: Time in the market is more effective than timing the market.
• Real Returns: Focus on outpacing inflation.
• Diversification: Prepare for multiple scenarios.
• Compounding of Assets: Growth on growth over time.
Headline 1: US Stocks Soar as Washington Pauses Most Tariffs
The Facts:
On April 2, the administration announced sweeping tariffs on a wide range of imported goods. Just one week later, a 90-day pause was issued for many trade partners. After an initial market decline of nearly 20%, stocks reacted strongly, posting one of the highest single-day gains on record, up 9.5%.
The Framework:
Trade policy is just one of many factors influencing market dynamics. Tariffs can create both winners and losers, reminding us that markets don’t move uniformly. Diversification is key — it helps ensure that when one part of your portfolio faces pressure, another may benefit.
This event also reinforces the principle of Time in the Market. Attempting to time market moves can be detrimental: missing just the 10 best days over the past 20 years would have reduced a 10% annualized return to just 6%. That’s missing just 10 out of roughly 5,000 trading days.
Our Approach:
Maintain a strategic allocation that includes broad global exposure, fixed income assets to cushion volatility, and a dedicated assured income segment for near-term spending needs.
Headline 2: Market Volatility Remains Amid Economic Uncertainty
Markets have seen increased daily price swings, with the S&P 500 down around 10% year to date.
Short-term volatility is a normal part of market behavior. Historically, 10% corrections occur about once per year, while 20% declines (so-called “bear markets”) happen approximately every three years.
Our Time Horizon and Compounding frameworks remind us that enduring turbulence is often part of achieving long-term growth.
One powerful chart we reviewed highlights forward returns after the 10 worst single-day losses since 1950. Despite those sharp drops, markets have historically rewarded those who stayed invested.
Our Approach:
Diversify not just by asset class, but also by time horizon. Stage growth assets in longer-term “buckets” while maintaining 2–3 years’ worth of assured income for near-term needs. This structure isn’t just strategic — it’s psychological, helping to anchor decisions during periods of volatility.
Ultimately, we don’t focus on guessing short-term market movements. Instead, we build strategies designed to endure — to grow your wealth in real terms over time. Markets will move. Policies will change. Headlines will come and go. But the underlying principles we use to navigate these moments remain steady. That’s the real value of a framework: not just understanding today’s news, but staying grounded for tomorrow’s unknowns.
At Vector, our role is to help you build and maintain a plan that endures — rooted in thoughtful frameworks, intentional actions, and a clear understanding of what matters most: your goals.
Regulatory
Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.
Information expressed does not take into account your specific situation or objectives, and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation.
Investments involve risk and unless otherwise stated, are not guaranteed.
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