This is a blog that I found difficult to write, not because the global markets are selling off with apparently no signs of a light at the end of the tunnel; not because we do not understand the economic consequences of the US tariffs that have wrecked havoc on global financial markets; it is because no one has yet conjectured the extent, the magnitude and the duration of this global paradigm shift, which sees the global economy starting to swing from one end to the other. Since the reciprocal tariffs were announced on April 2, 2025, the global stock market lost more than $5 trillion over the two trading sessions that followed.  The bleeding can continue until the stock market finds a bottom.

For most of us who were born after World War II, we have, consciously or subconsciously, lived through a prosperous and peaceful world driven by globalization, trade liberalization, and a global order based on rules of law. This is starting to unravel.   Thanks to Trump’s trade policy, we are on the brink of entering an era which virtually none of us has ever seen and experienced: the rise of trade protectionism, de-globalization, and the disintegration of the rules-based economy.

I firmly believe that these tariffs and counter-measures will distort the global supply chain and lead to severe mis-allocation of economic resources and financial capital. Manufacturing that should not have taken place in a country is now finding its hold there. Financial capital that should not have been invested in a country is now flowing in there. Inevitably, economic costs will rise and production efficiency will fall. As a result, corporate profitability could erode on a sustained basis, which would not not bode well for equity markets.

Have we reached a point of no return? This is my pressing concern. If so, we will be investing against a backdrop that is fundamentally different than the past 80 years. A new and creative investment strategy is called for.

Having gone through numerous secular bear markets including the TMT bubble in 2000, the Lehman crisis in 2008 and COVID in 2020, I have a few thoughts that I would like to share:

1. Be prepared to cope with a market imminently flooded with fear and pessimism. DON’T PANIC. It’s time we kept informed and stayed calm and rational. Remember, a crisis always come with new opportunities.

2. Stay with the high ground. Hold on to great companies if you have already invested in the market. Time after time, cycle after cycle, these companies will shine and come out of the crisis stronger.

3. Safe havens are hard to come by, but idle cash is king. Buying every dip will not work. Look before you leap.

This is a good time to speak with your investment advisor, review your portfolio and ensure it is on track to achieving your long-term goals.  Hang in tight.  This storm shall pass.