Tariff Turmoil, Trump’s Turbulent Era, and the AI Wave: Three Experts Guide You on Restructuring Investment and Retirement Strategies

Investment Anxiety in the Face of Changing Economic Policies

As tariff policies once again become a focal point, the return of the volatile Trump, and the rapid disruption of industries by artificial intelligence, many people are starting to question: “Should I change my investment portfolio? Should I even adjust my career and retirement plans?” Bloomberg interviewed three financial experts to provide the most pragmatic advice for different age groups and asset planning stages.

Interviewees

Kyla Scanlon: Author of “In This Economy?”, focusing on financial education for the younger demographic, and running a personal newsletter.
Christine Benz: Director of Personal Finance and Retirement Planning at Morningstar Inc., author of “How to Retire: 20 Lessons on Happiness, Success, and Wealth”.
William Bernstein: Neurologist and investment advisor, author of “The Four Pillars of Investing” and “How Trade Shaped the World”.

Young Investors Under Financial Anxiety: From Diverse Skills to Rational Risk Diversification

Kyla Scanlon points out that this generation of young people has lower confidence in the economy. From the impact of the pandemic to high inflation, soaring housing prices, and unstable careers, she suggests that young investors should avoid a singular career development path and strengthen and diversify their skills, particularly in AI and economic analysis, to prepare for future changes.

She also reveals that Generation Z’s investment behavior often oscillates between “safety seekers” and “digital gamblers,” with some taking excessive risks by investing in meme stocks (like GameStop) or cryptocurrencies, while others completely avoid the market. She emphasizes, “Generation Z should ensure financial stability before starting to invest.”

Diversifying assets is fundamental to risk management, including allocations in utilities or high-growth tech stocks, and placing importance on the power of “compounding.”

Asset Allocation for Middle-aged and Retirees: Prudent Global Diversification and Inflation Defense

Christine Benz advises that middle-aged individuals in their 30s and 40s should distinguish between short-term and long-term goals, make good use of long investment horizons, and “embrace the market volatility” to find entry opportunities; while those over 50 nearing retirement should establish a low-risk asset pool for 7 to 10 years, reduce exposure to high-volatility positions, and hold enough cash or bonds to cope with market fluctuations.

She particularly emphasizes that the current global trend of “de-globalization” and trade barriers has led to more varied global market performance, urging investors to increase their “non-US market allocations.” In the face of inflation risks, she also recommends incorporating inflation-protected bonds (such as TIPS or I Bonds) and a bond ladder to preserve purchasing power.

Investing Should Not Follow Political Trends: Focusing on Cash Flow and Patience is Key

William Bernstein cautions against making investment decisions based on policies or political news, as market reactions are almost unpredictable. He cites the example of the night Trump was first elected, where the market initially plummeted before rebounding, demonstrating that policy variables cannot predict short-term market movements.

He suggests that individuals assess their “burn rate,” the proportion of funds withdrawn from their portfolio each year: Investors with a low burn rate (e.g., 2%) face lower financial risk; however, those with a burn rate as high as 4% need to be cautious in their allocations to avoid over-reliance on the stock market.

While he views the human capital of young people as a stable asset suitable for adopting a more aggressive investment strategy, he remains pessimistic about future market conditions, believing that investors should establish an emergency fund and prepare psychologically for potential unemployment in the next 6 to 8 months.

Tariffs and AI: Two Major Forces Restructuring the Economy Long-term

All three experts point out that the tariff policies proposed by Trump could potentially increase inflation and disrupt global supply chains, posing long-term economic risks. Bernstein even warns, “While the tariff policies of 1930 did not directly trigger the Great Depression, they indirectly contributed to World War II.”

On the other hand, they unanimously agree that AI is a highlight industry for investment and careers in recent years, especially during its initial growth phase with high return potential. However, Bernstein believes this will not destroy the job market: Historically, fears of technological unemployment (such as bank tellers or switchboard operators) have indeed led to direct job losses, but they have also created more new opportunities. Young people should maintain their ability to learn and adapt, without panicking about the future of AI replacing human jobs.

Expert Consensus: Stability and Flexibility are Key to Weathering the Storm

Facing the multiple challenges of tariffs, AI, and geopolitical issues, all three experts emphasize: “Young people should focus on skill enhancement and long-term investments; middle-aged individuals must balance risk management and global asset allocation; and retirees should concentrate on cash flow and hedging.” It is well-known that diversified investments, diverse skills, and inflation-protected assets are the invincible rules for navigating the tidal waves of tariffs, technology, and policy. This wave of economic transformation may not only pose risks but also present opportunities, as long as you are well-prepared.

Risk Warning

Investing in cryptocurrencies carries a high level of risk, and their prices may fluctuate significantly, potentially resulting in the loss of your entire principal. Please assess the risks carefully.