Politics Aside—Follow the Liquidity

We’re in a moment of serious uncertainty. A new tariff war is unfolding, tensions are rising between global trading partners, and political headlines are more heated than ever. It's easy to feel overwhelmed.

But when it comes to investing, staying grounded is essential. Whether or not you like Donald Trump, one thing is clear: he wants the Federal Reserve to act.

Trump’s Strategy and the Fed

Trump is pressuring the Fed to:

• Lower interest rates

• Resume large-scale bond buying (Quantitative Easing)

Why? Because his agenda—including reshoring manufacturing, fighting trade battles with tariffs, and expanding U.S. energy—depends on cheap money. These policies can create friction and slow growth, so he’s looking to the Fed to provide the fuel.

If the Fed responds, it means more liquidity in the system. That extra money doesn’t just sit—it moves into financial markets. And historically, when liquidity rises, asset prices rise, often across the board: stocks, bonds, gold, commodities.

You don’t need to approve of the tactics. But understanding the mechanics helps you respond wisely.

Tariffs, Uncertainty, and Why Discipline Matters

Tariffs create economic friction. They disrupt supply chains, raise costs, and trigger retaliation. This adds even more uncertainty to the outlook.

And uncertainty often shakes markets. But here’s the good news: your investment strategy doesn’t have to depend on predicting outcomes. It just needs to be built to adapt.

Rebalancing in a Bear Market

Let’s say your portfolio looks like this:

• 50% Stocks

• 30% Bonds

• 10% Gold

• 10% Commodity Trend Following

Now imagine a steep market drop triggered by tariff tensions or geopolitical shocks. Stocks fall hard, dropping to 40% of your portfolio.

That’s when rebalancing comes in. You trim from what held up—like bonds or gold—and buy more stocks while they’re down. It’s not guessing. It’s a system. And it helps you stay invested in a rational, disciplined way even when emotions are running high.

The Bottom Line

Trade wars, elections, inflation fears—they all create noise. But beneath the noise, the flow of money matters most. If the Fed injects more liquidity to counter the effects of tariffs and rate pressure, asset prices are likely to follow.

Rather than reacting, build a portfolio that’s ready for volatility and uses it to your advantage.

Let’s talk if you want help building a resilient, flexible strategy that works in real-world conditions—not just ideal ones.