US stocks dropped after the government moved forward with new taxes on imported cars, which brought back fears of a trade war. Big car companies like Toyota, Mercedes-Benz, and GM all lost value, and investors worried that prices could rise. 

Meanwhile, interest rates on 10-year government bonds rose to 4.37%. That usually means people are expecting inflation or just feeling uncertain about the economy. On the bright side, sales of big-ticket items like airplanes and machinery were stronger than expected, which shows that parts of the economy are still doing well. 

These kinds of policy changes can cause short-term problems, but markets have always bounced back from similar situations before. For example, during the US-China trade war in 2018, the S&P 500 dropped nearly 20% in the last quarter of the year due to rising tensions and uncertainty. However, in 2019, after progress was made in trade talks and the Federal Reserve eased interest rates, the market rebounded with a 28.9% gain. 

Then in 2022, inflation spiked to its highest level in 40 years, prompting the US central bank to raise interest rates quickly. This made borrowing more expensive and hurt stock prices — the S&P 500 fell around 18% that year. But in 2023, as inflation began to cool and the economy remained resilient, the market started to recover. 

These examples show that while news like tariffs or rate hikes can cause short-term drops, the market adjusts and finds its footing over time. For long-term investors, the key is not to panic but to trust that the market's ability to recover has been proven time and again.   

In the UK, people spent more money in shops in February — sales rose 1% from January, and 2.2% higher than last year. That was a surprise, since experts expected a drop. It shows that even with global concerns, people in the UK are still spending. 

Despite what the press might have you think, the UK economy is showing signs of strength. After COVID in 2021, retail sales also went up unexpectedly, helping the UK grow at its fastest pace since World War II. This kind of resilience can help support long-term investments. 

Even though inflation and interest rates have been in the spotlight, UK households have continued to spend, especially on essentials and everyday goods. It suggests that people are adjusting to higher prices rather than pulling back completely. In fact, during 2023, UK GDP avoided a recession despite multiple forecasts suggesting otherwise. The services sector — which makes up a large part of the UK economy — has stayed relatively strong, and job numbers have remained steady. These are encouraging signs that the economy is more adaptable than many give it credit for. 

So, while short-term headlines might sound worrying, the broader data tells us that the UK consumer is still active, and the economy is more stable than it appears. And for long-term investors, that’s what really matters. 

European markets fell this week because of worries about the new US tariffs on cars. Many European countries rely heavily on car manufacturing, so this could hurt their profits. 

These kinds of worries can cause short-term drops, but Europe has shown strong recovery in the past. During the COVID-19 pandemic in 2020, European economies were hit hard, with major countries like Italy and Spain experiencing steep declines in GDP. However, the European Union responded with massive support measures, including the €750 billion recovery fund. By 2021, the Euro Stoxx 50 index rebounded by nearly 21%, and economic growth resumed across the continent. 

More recently, despite ongoing challenges like energy prices and geopolitical tension, Europe has continued to invest in green energy, digital infrastructure, and industrial innovation. These long-term initiatives can create strong growth potential for investors who remain patient and diversified. 

After a strong start to the year, Chinese tech stocks fell. Companies like Alibaba dropped because of concerns that they are building too many data centres, which might lead to oversupply. 

It’s normal for markets to cool off after a strong rally. Back in 2015, Chinese stocks dropped sharply after a major bubble burst, but the economy kept growing, and many investors saw gains in the years that followed. In 2021, China’s government introduced strict regulations on tech companies, which caused sharp declines in major firms like Tencent and Alibaba. Yet despite these setbacks, China has remained focused on areas like green technology, artificial intelligence, and advanced manufacturing. 

As the world’s second-largest economy, China continues to play a major role in global growth. While investing there can come with more ups and downs, the long-term potential remains strong. Staying diversified and patient has proven to be a smart strategy for those with exposure to Chinese markets. 

This week, investors preferred short-term government bonds over long-term ones. That usually means people are worried about near-term problems, like inflation. 

Bonds are still a key part of a balanced investment plan. In 2008, when the financial crisis hit and stocks fell by more than 30%, long-term U.S. government bonds gained over 20%. They acted like a shock absorber in people's portfolios. 

Today, investors are watching inflation and interest rates closely. While short-term bonds are offering more attractive yields right now, long-term bonds still help reduce overall risk in your portfolio. And when markets become uncertain, having a mix of bond types can give you more flexibility and help protect your investments. 

Gold hit a new record high this week, as investors looked for safer options. Copper also went up because of trade concerns and possible supply problems in Chile. Oil prices rose after threats of new tariffs on Venezuela. 

Commodities are a great way to balance your portfolio. They don’t always move in the same direction as stocks and bonds. During the COVID-19 pandemic in 2020, gold prices surged by over 25% because people were looking for safe places to put their money. At the same time, copper prices rose sharply in 2020 and 2021 as countries spent more on infrastructure and technology projects that needed raw materials. 

Commodities like gold, copper, and oil are tied to global supply and demand. When there's economic uncertainty or supply issues, their prices often go up. Including them in your portfolio helps manage risk and offers more ways to grow your money over the long term. 

US stock funds improved slightly but still struggled in tech, especially after Microsoft said it would slow down data centre construction. That hurt semiconductor companies. European stocks dropped on trade concerns, and Chinese tech fell. Bonds were mixed, and gold performed the best. 

Every type of investment goes through good and bad periods. That’s why it’s important to spread your money across different assets. A 60/40 portfolio — which means 60% in stocks and 40% in bonds — has historically provided solid long-term returns. Over the last 15 years, this kind of portfolio returned around 7% per year, even though it went through the global financial crisis, the eurozone debt crisis, and the COVID-19 pandemic. 

Having a mix of stocks, bonds, and other assets like commodities helps smooth out the ride. When one area is down, another might be up. This balance can help you stay invested with more confidence, no matter what the headlines say. 

When markets get rocky, it’s natural to feel unsure about whether you should stay invested. But the truth is, reacting emotionally to short-term moves can do more harm than good. 

Let’s look at the numbers. Over the past 20 years, if you stayed fully invested in the US stock market, your average annual return would have been about 9.7%. But if you missed just the 10 best days in the market, that return would have dropped to 5.5%. And if you missed the 20 best days, it would have fallen all the way to 2.9%. 

Even more surprising? Most of the best days came right after the worst ones. In fact, 7 of the 10 best days happened within two weeks of the 10 worst days. That means if you panicked and sold after a drop, you likely missed the bounce back. 

Markets recover. They always have. Staying invested means giving your money the best chance to grow over time. It’s not about trying to guess what happens next — it’s about being there when the market moves in your favour. 

Markets will always have noisy weeks. This one had plenty of them. But history and data show that sticking to your investment plan works better than trying to guess what comes next. 

If you’re ever unsure, we’re here to help you stay on track and focus on your long-term goals – just get in touch today!