In this quarter’s investment strategy video, "Actions Over Words," George Hosfield, CFA, delves into the disconnect between consumer sentiment and actual economic behavior. Despite low consumer confidence, retail sales are soaring and the labor market is stabilizing.

The mood among American consumers, by many accounts, is grim. This sense of uncertainty and anxiety has been pervasive in 2025.

With the S&P 500 tumbling 18% in April from its February high, and subsequently rallying back to an all-time high, the second quarter was a wild rollercoaster for investors.

Tariffs have long been used globally to support local industries by incentivizing citizens to purchase domestically made products. At the turn of the 20th century, tariffs were the primary source of tax revenue for many nations. Today, funding comes from income, payroll and corporate taxes. In the U.S., tariffs accounted for approximately 90% of federal income until the Civil War. After World War II, tariffs fell out of favor in developed economies because they often led to reduced trade, higher prices and retaliation from abroad.

While market volatility has been highly-elevated in recent weeks with the almost daily change in the proposed tariff landscape, in this quarter’s investment strategy video we endeavor to provide a measured perspective on what lies ahead and how navigate the psychology of investing.

After last November’s election, it was widely expected that tariffs would become a significant focus in 2025. Initially, markets downplayed these concerns, viewing them primarily as negotiating tools rather than serious economic threats. 

After a quick start that saw the S&P 500 jump 5% in the first three weeks of the year, markets abruptly reversed course and gave it all back and then some, with the blue-chip index posting a 4.3% loss for the quarter.