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“March Madness” around this time of the year usually refers to college basketball … but many investors might use the term for what they have seen in the stock market of late.

During normal times, a 10% (or more) drop in markets from recent highs takes place every couple of years … and each time is met with headlines calling for the world to end and experts escaping from the woodwork calling for further pain.  But because of the rhetoric coming from Washington these do not seem like normal times, especially due to the speed at which this took place.

Especially troubled during times like this are retirees … as when money is taken out of savings to … well … survive … it becomes more difficult to build it back up.  For example (get ready to be either bored or scared), if a portfolio drops by 20%, it takes a rebound of 25% to bring it back to its previous level.  But if a portfolio drops by 20% … and you take out the “safe” 4% … the needed replenishment rebound jumps to 31.58%. Ouch.

I found it interesting to hear the administration (via Commerce Secretary Lutnick) tell of the plan to have no taxes for those earning less than $150,000/year. The sound of this will make some happy but with this goal going hand-in-hand with plans to eliminate taxes on tips, social security and overtime, causes some to ask just where the money would be coming from. Tariffs?  Um … what?

There is one major headwind the administration is facing right now as comments are made that there might be short-term disruption as we work to build up U.S. manufacturing in the face of a Bloomberg poll … and that is the actual immediate effect on Main Street.

The question was asked to tell what was “most important in determining a strong U.S. economy.”

In reverse order, responses were:
#3) Producing more of what we buy here in the U.S.
#2) Strong job market and rising wages
and coming in at #1 … with a percentage rate much higher than the others:
#1) Being able to comfortably afford monthly expenses.

This seems to conclude that people will continue to search for cheaper prices regardless of where things are sourced and being made in the U.S. … while preferable … might not be the determining factor of many making purchases.  When you think about it, how many times has the “made in the USA” chant been promoted over the years … only to have almost all of us wearing clothes … and owning electronics … made elsewhere?

That about wraps it up for today as markets are slightly up, improving my mood.

I will admit, due to the market drop, things were unsettling over the last few days … and I found myself resorting to prank phone calls to lighten my mood.

My recent favorite is dialing the hotel chain “Best Western” and giggling when they answer with …

… “Best Western” …

… to which I reply, “High Noon with Gary Cooper” … and hang up.

… it’s the little things.

Have a great day,

Joseph G. Witthohn, CFA

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