Hello, my name is Chad Taylor, managing partner with MDT Financial Advisors here in Houston, Texas. Today is Monday, March the 10th, 2025, and I wanted to hop on and discuss what's been going on in the markets. And here the last couple of weeks, it's been a little challenging to say the least. Have we seen markets like this before? Yes, of course. Does it make it any easier when markets are going down? No, it doesn't. It's always tough. And so I wanted to talk about a few of the things that we're seeing in the markets right now, and as I've said in videos in the past or in person in the past, what do you do when you're in one of these markets? And just to kind of put it in perspective, last week was pretty rough. The s and p 500 was down about 4.6% for the week.

The NASDAQ was down more kind of those tech heavy stocks. It was down about 5.4%. Now remember, that market did really, really well last year and the year before because of those magnificent seven stocks and they're kind of getting beat up or some of 'em are getting beat up right now. The Dow Jones was down less last week. It was down about 3.6, which is normally not unsurprising when you have one of these pullbacks because the Dow has stocks that are not, sometimes may not be quite as aggressive, although all stocks are aggressive, but it was down less last week. And so what do you do during these times? I'm going to bring Nick Rero and Dante Esei on here in a second to talk about one of the biggest reasons for this pullback, which is the tariffs. And we had a report, and by we, I mean Wells Fargo's Investment Institute that talked about this. And so I want to get them to go over it with me so that you can hear different perspectives or different ways of presenting the information.

But it was what do you do? The question you ask yourself every day is, do I stay in the markets? Do I get out of the markets? And as I've said before, I've been around advisors that may not have been in the business quite as long as myself or Larry has at different conferences or different things. And I always hear 'em and I kind of chuckle when they say, well, I tell my clients don't do anything and they listen and it works out. And I remember that's what they teach you. It's not timing. The market is time in the market, but I'm not naive enough to know that it's a discussion that probably needs to be had if you are getting nervous. You wouldn't be human if you weren't nervous a little bit. But if you're getting to that point where you want to bail out completely, it's time for us to talk about it.

Let's talk through your specific scenario when you need the money, what you need the money for, when, what does your plan look like right now with this pullback? Because we always forget, and me included, we dealt with a market like this back last April. It was pretty rough. I don't remember exactly how much it was down, but last year was in the month of April was pretty rough. Markets found a bottom. They worked their way out and ended up having a decent year. Well, that happened this time. It's too early to tell at this point. If you listen to what, I'll let Dante and Nick kind of talk about it, but we think that this will pass last April will. But there are some things that are concerning and we have to kind of keep an eye on. But last April it happened again. Usually the markets sell off or pull back and go down eight to 10% every year.

Last year it wasn't quite 10, but it was noticeable. And as I've always told people here, now that the Dow Jones is over 40,000, a 10% pullback is noticeable in these big downturns and the numbers. Percentage wise, it's the same as it's always been, but it just feels different when you have today. The market's down again after being down most of Friday, but then closing positive Friday and it was very volatile. And so if you are at that point where you're getting more nervous than normal, you don't have to sit there and just fret about it, let's talk about it. If we need to make adjustments, we can. If we don't need to make adjustments because our plan's still intact, we can do that as well.

Okay, so as I mentioned, I was going to have Nick Renfro and Dante Milanesi come on with us and talk about this report that, let's see, it came out on, well last week around February the fourth. So some things have changed since then. Some tariffs have been implemented, some have been delayed. But in general, I just wanted to kind of talk about what was going on in this report. And if you'd a copy of it, of course, let us know. So Nick, if you want to start us off and kind of tell a little bit about what you read from it.

Yeah, Chad. So I noticed that Wells Fargo put this report out last week, our friends over there at the Investment Institute, and I read through it. I thought it was a great point. And I think it's good that we're doing this video to kind of talk about some of the concerns we've seen with the tariffs. Obviously the markets are having a little bit of a rough start to the first quarter that all the three major indices are down s and p 500, Dow Jones Industrial, the nasdaq. So we've seen quite a bit of short-term volatility that's been caused by these tariffs. There's a lot of uncertainty about there. Whenever there's uncertainty and investors tend to react to that uncertainty. So it's happening now. It's happened before, it'll happen again. We can't necessarily say we didn't see this coming. If we look back at Wells Fargo's 2025 year outlook that they send out in December, they talked about the tariffs.

They said that there might be some short-term volatility. Now of course, the gravity of the situation and the duration of the volatility, nobody ever knows that it could be wrapped up by the end of the week. It could continue on until next week. We might be in for a little bit longer, but we, we'll kind of have to just keep an eye on it. So the question is what do we do? What do we do in response to this volatility? And sometimes the answer is making small changes. Sometimes the answer is not a whole lot. At this point, we're not suggesting any big changes. I never want to be dismissive of volatility. I don't like it. I've never met a person that does like it. You wouldn't be human if you didn't worry about stock market volatility a little bit, right? Nobody likes being down in their account.

But the fact and logistical side of me reminds myself that, Hey, we're going to go through times like this. Pullbacks are normal occurrences. It's part of being a long-term investor. And when we look at Wells Fargo's guidance, we're still saying we like large US companies on the stock side, on the fixed income side, we still like us. Investment grade fixed income with a timeframe between three and seven years is I think what the report said. And so having this exposure is I think not necessarily a bad thing for investors who are in it for the longterm, which is the majority of our clients where most of our clients' money is kind of earmarked for long-term goals.

Good. Okay. Thanks Nick. So Dante, I wanted you to come in and talk a little bit more about the tariffs. And what I found interesting was the consumer and industry pulling some of those expenses forward in 2024 because of the potential of tariffs. But I wanted you to kind of go over that, if you don't mind.

Yes, absolutely. So as far as in the report, what Chad was referencing was the fact that in 2024, a lot of people or a lot of companies at that point did a lot of the pre spending because they did anticipate some form of tariff coming this year. So with that being said, we still don't know exactly what the ramifications of the tariffs are going to be, but at this point in time, there was some prevention done ahead of time. And what we're looking at today is we're still seeing what these percentages on each of these countries, what it may take place in terms of the spending goes. But we still have quite a bit of time in terms of if they're going to stagger tariffs, if they're going to do anything different. So I do think it's a great time to just kind of wait and see and kind of what happens at this point in time.

But as Nick mentioned, and as Chad kind of alluded to as well, I do think it's a great gut check time to see where you're at, make sure you're reviewing not only your portfolio, but your retirement management system, making sure everything's buttoned up. And as we all know, to some extent, this happens about one to 1.2 times a year, the six to 10% pullbacks. And again, it's a great time to check your benchmarks, make sure you have everything in order, because as Nick mentioned, we are long-term investors looking at the foreseeable future and not panicking in terms of what happened short term. We may see some volatility continue, but overall, we still think 5, 10, 15, 20 years down the line, we'll be in better shape. And that's why we're always here as a sounding board as a resource. So continue to tune in to these videos that I know Chad's going to be trying to put out a little bit more of, but always reach out if you need anything.

Great. Thank you, Nick. Thank you, Dante. I appreciate it. I think we've already got another little topic for later this week, so we'll try to get that video prepared as well. But as Dante said, and Nick said, if you have questions, don't be a stranger. Let's talk and we'll get through this as we always do. Thank you and have a great day.