Guidance For Economic Disruption with Mark Biller

Jan 21, 2025

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Major changes are likely coming for the U.S. economy. Will you be ready for them?

We have a new president who’s pledged to overhaul the economy. How will that affect investors and the markets? Mark Biller joins us today with a plan for managing “anticipated disruption.”

Mark Biller is Executive Editor and Senior Portfolio Manager at Sound Mind Investing, an underwriter of Faith & Finance.

Learning from the Past: Market Trends in Review

Before diving into predictions, it’s essential to recognize the value of reviewing recent market trends. Forecasting is often unreliable, so Sound Mind Investing focuses on building robust portfolios that can withstand a variety of market conditions.

Key Observations from 2024:

Strong Stock Market Performance: 2024 was a banner year for stocks.
Struggles in Bonds: Higher long-term interest rates created challenges for bond investors.

Rather than predicting, SMI uses trend-following strategies, aligning portfolios with market behavior to enhance resilience against uncertainties.

What Could End the Bull Market?

Bull markets typically end due to two primary catalysts:

Federal Reserve Rate Hikes: With recent rate cuts, a pivot to hikes seems unlikely.
Economic Recessions: Despite fears, current conditions—strong GDP growth, low unemployment, and robust balance sheets—make a near-term recession improbable.

However, investors should remain prepared for routine market corrections (10-15%), which are typically short-lived and not worth major portfolio adjustments.

Trump 2.0: Policy Changes and Market Impacts

President Trump’s second term brings both optimism and uncertainty. Business-friendly policies like tax cuts and deregulation are expected to boost growth, but his stance on disrupting global free trade could create volatility.

Key Policy Areas to Watch:

Immigration and Tariffs: Potential economic implications tied to trade disruptions.
Deficit Reduction: Balancing growth-oriented spending with inflationary risks.
Energy and Taxes: Initiatives that may shape inflation and economic growth dynamics.

Wall Street’s response will likely depend on how aggressively these policies are implemented. While markets thrive on stability, Trump’s approach could introduce significant fluctuations.

The National Debt: An Ongoing Challenge

Reducing the national debt remains a pressing issue, but Mark is skeptical about achieving a balanced budget in the short term. Growth-driven strategies may help manage deficits, but cutting government spending poses immediate challenges for economic momentum.

Staying the Course Amid Uncertainty

With many moving parts, confidently predicting cumulative economic and market outcomes is impossible. However, investors should:

Stick to long-term plans.
Maintain proper diversification.
Continue regular contributions to retirement plans.

The focus should remain on steady progress toward financial goals rather than reacting to short-term disruptions.

For a deeper dive into these topics and actionable strategies, read Mark’s full article, “Trump 2.0: Using Objective Investing Models to Guide Us Through Anticipated Disruption.” This article offers a clear framework for understanding the potential market impacts of Trump’s second term while encouraging a disciplined investment approach.

On Today’s Program, Rob Answers Listener Questions:

My husband and I are researching long-term care options as we prepare to retire. We've considered long-term care insurance or an annuity with a long-term care rider, but we're having trouble deciding which is best for our situation. Do you have any recommendations?

Resources Mentioned:

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