Tariffs Are 'Changing The Landscape' — Here's How You Should Navigate It_ Financial Planner - video Dailymotion

Forbes Breaking News

Kelsey Wilson, founder and CEO, BlackLines Financial, joined "Forbes Newsroom" to discuss consumer sentiment and the market volatility surrounding President Trump's tariff plan.

Transcript

00:00Hi, everybody. I'm Brittany Lewis, a breaking news reporter here at Forbes.

00:07Joining me now is Kelsey Wilson, founder and CEO of Black Lines Financial.

00:12Kelsey, thank you so much for joining me.

00:14Of course, of course. Thanks for having me.

00:16I really want to talk about where we are right now with President Trump's tariff plan

00:21and the volatility that it's caused.

00:24President Trump said on Friday that there will unlikely be another 90-day tariff pause

00:30and it seems that he and the White House are in full-out deal-making mode with other countries.

00:36But over the past few weeks since he announced his tariff plan, global markets have been roiled

00:41and the word that can really characterize the moment that we are in is a moment filled with uncertainty.

00:47As a financial planner, what are your thoughts on this uncertain moment?

00:51Yeah, for sure. Definitely uncertainty really wraps and really tells the story of really what's

00:58happening right now. So when we think about this moment, things about this moment of time,

01:04this uncertainty does really cause what we call on the fear side of things.

01:09So when we have uncertainty, it produces fear and then emotional responses around fear.

01:15So at the end of the day, it really is important to really know where we're at.

01:19And when it comes to where we're at in the days, we're in a space where tariffs are changing the

01:25landscape of what's happening in the economy. So as that landscape is shifted, it's going to be

01:31very, very important for executives at companies, which will be able to be able to look at what's

01:38happening and get to a place back to profitability as these uncertain things are happening.

01:44So with that happening, with these landscapes changing, I'm pretty confident that executives

01:51will be able to navigate these new landscapes, navigate these new tariffs and come back on top,

01:59just like they've done over the past pretty much hundreds and hundreds of years around the market.

02:03Like you said, with the uncertainty comes fear. How does a business owner first, let's talk about

02:11business owners first. How would what would you recommend that they do to really navigate this

02:16time full of uncertainty?

02:19Yeah, I think the biggest thing with that is really being informed, staying informed on what's

02:24happening, because essentially what's happening is there is that landscape shift and there's going

02:29to be things that didn't make sense for a business owner to do last year that make a lot of sense to

02:34do this year. And vice versa, things that they did last year doesn't make sense to do this year.

02:40So it's really important to stay informed, stay really tight with your financial plan

02:44and making sure that you're staying on top of that and updating things accordingly. So that way,

02:50as things adjust with the new landscape of tariffs, your financial plan and your strategies are also

02:57adjusting along with it. When you're looking at your financial plan, what's at least one thing

03:03you would say didn't make sense to do last year, but now in light of this uncertain tariff time would

03:09make sense to do this year? Yeah, that's a really great question. And when it comes to business owners,

03:16a lot of business owners are maybe taking hits when it comes to the tariffs. Maybe their structures

03:22may have changed and their profitability might be a little bit lower this year. So if their

03:27profitability is a little bit lower with these current times, it may make sense to evaluate

03:33their tax strategy. And with that being said, maybe they have some pre-tax dollars and different

03:40retirement structures that may make sense to look into converting those over to post-tax strategies.

03:46On that end, being the fact that the landscape is changing, they may be taking a little bit of pause

03:51on higher profits like they were doing last year and kind of moving things around to kind of make

03:56sure that they're taking advantage of these adjustments. So that way, when they get back to

04:01a level of profitability, they pretty much move the musical chairs around into the right spots.

04:06So that way they can continuously grow on their financial journey.

04:09I want to talk about some new stats that kind of paint a bleak picture. According to the University

04:16of Michigan, consumer sentiment dropped over 8% since last month and 32% year over year. This is one of

04:24the lowest points historically that consumer sentiment has ever been in since the 1950s. What does that

04:30indicate to you? Yeah. So with that drop in the consumer sentiment, I really just think it's coming

04:38down to when it's called to the fear side of things in that uncertainty. So when we see that,

04:43we can kind of wrap it right back to that, that uncertainty of what's happening and uncertainty

04:48of what's going on and then just the fear of that. And I do believe that as time goes on and there's

04:57more information that's given out and things become a little bit more clear, the landscape becomes a little

05:03bit more stable, that will change and that will shift. And so it really just boils down to a lot

05:09of people really not knowing what's going on or really not knowing what's going to be the next move.

05:14So as that becomes more and more clear, I do see those stats shifting and going back in the other

05:19direction. Speaking of that fear side, I mean, a lot of people over the past month did not even want to

05:25look at their 401k. They were scared to do so. And whenever there is market volatility, you're going

05:30to see more dramatic swings in your 401k. What's your advice to someone who did log on, might have

05:38seen that number and their heart might be in their stomach right now, seeing that their 401k isn't worth

05:43as much as it was before the tariff plan was announced? Yeah. So one thing is just understanding

05:50that these are what's called paper losses. So when it comes to the market taking a dip and things

05:56changing, that is just the value at the time that you opened it. So at this point in time, you're likely

06:03not going to be taking money out of that 401k at this point in time. So it is only a loss on paper.

06:10So what I would tell someone in that space is just making sure that one, you're relying on your initial

06:16financial strategy and investment strategy that you were initially set up when you opened up that

06:21account and you started putting money into that. Because when it comes to investments and structure,

06:27it's all about preparation. And when you're putting money into your 401k and you're putting money into

06:31your investments, most people's 401k's investment strategies are based upon their retirement time

06:37frames. There's a lot of target date funds in those spaces. And it's based upon when they're going to

06:43retire. So just knowing that this is part of the preparation that was done when you set up your

06:49401k. And when the market does take those dips, you don't want to panic. It's a turbulent time.

06:55Just like when you're on a plane, the pilot will tell you to put your seatbelt on and just kind of

07:01ride it out. The turbulence will go away. The worst thing you can do is take your seatbelt off and jump

07:06off the plane. So we really want to make sure that individuals realize that it is a turbulence. It is going

07:11to go up and down. But don't panic. Stay the course and then allow the market to recover.

07:18To your point, as a financial planner, you're saying we are in the midst of that turbulence

07:23right now. We are when the flight attendant or even the pilot gets on and says, we're going through a

07:29rough patch right now. And if you're sitting there, I mean, where do you expect us to get into a soft

07:36landing? Because right now, when it comes to these tariffs, they're really in three camps.

07:40Everyone has that baseline tariff. In the other group, the reciprocal tariffs are paused,

07:47except for China. And then when it comes to China, there has been a tit-for-tat trade war,

07:51and that's ratcheted up to as high as 145%. So where do you expect the end result to be?

07:59Yeah. And then when it comes to that, that end result is really based upon that uncertainty. So it's

08:04going to take time for negotiations to happen and things to kind of land and really be in a place

08:10where we know what the landscape is going to be. And that's really where that uncertainty comes into,

08:16is there is not really a solid answer of when that is going to be. But when it comes to that,

08:23we do know that each country, they want to get to a place of profitability. So they're both

08:28incentivized on all sides to try to get to a resolution to this as quickly as possible.

08:34So just based upon the fact that each side wants to come to the table, they want this to be resolved

08:40and want to be into a spot where they can profit in their business and the countries can thrive.

08:45I don't think it's going to take too long for them to come to a space. So that way,

08:50they can get back to the business as usual. Tariffs are expected largely to raise prices and inflation

08:57rates and shrink consumer spending and disposable income. What is your advice to people, maybe the

09:03average consumer or the average investor to properly prepare for all of that?

09:09Yeah, I think it's just keeping an eye on what you may traditionally purchase and maybe looking into

09:15different alternatives or being open to that. And the reason why I say that

09:20is because as these tariffs start to happen, there are some places that consumers go to,

09:26maybe they're purchasing certain materials for their home, where those prices might go up at one

09:33company, but the other company may have figured out a way with the tariffs to be able to get a lower

09:39price somewhere else. So maybe you might have an affinity for one product, just keeping your eyes

09:46open for other products because that might shift that landscape where certain stuff that used to be

09:52higher might be cheaper and stuff and stuff that used to be cheaper might be higher. So just being

09:57open to looking at what you have in your cabinets and maybe what you have on your automatic purchases list

10:05and being open to essentially change that and seeing if there's something that might be a better

10:11fit for you financially based upon what you purchase on a regular basis.

10:16As someone with a financial planning perspective here, in the conversations when it comes to tariffs,

10:23it's volatility, there's fear, there's panic, people are concerned, people don't want prices to rise.

10:30Do you think there's anything missing really from the national and international dialogues when it

10:34comes to this tariff plan? Yeah, I think the biggest thing that's missing is the fact that it will take

10:43time for that landscape to change. So when it comes to tariffs, we hear a lot about the negative sides of

10:50tariffs and the negative sides of prices will go up, things will change, but there's not as much on the

10:57positive side of tariffs. In regards to as things change, there are going to be certain things that

11:04will potentially be cheaper for consumers. So when we're looking at that as those landscapes adjust,

11:10there is not always going to be that everything's going to be more expensive. Certain things will be

11:16less expensive just because of the fact that a company decided to shift gears and go and get their

11:23materials from one country that's a little bit cheaper, even with the tariff change. So there will

11:28be some positive things that will come from it. So that's one thing I think that is missing out of

11:34it is a landscape shift. So with anything that's a landscape shift, sometimes things are good,

11:41some things are bad, some things that you are accustomed to are going to change for the negative,

11:47some things that you weren't accustomed to and didn't really think about are going to change for

11:51the positive. So it's just very important to realize that it's not all bad and just really look at the

11:56landscape and seeing how things are changing. So that way you can essentially move forward accordingly

12:03based upon those changes. Well, as we get a fuller picture here of the impact on tariffs,

12:10I hope you come back on and join me and break it down. Kelsey Wilson, thanks so much for the

12:14conversation. Of course, of course. Thank you. And thank you for your time. And I'm so happy to be part of

12:20this.

Tariffs Are 'Changing The Landscape' — Here's How You Should Navigate It_ Financial Planner

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