Welcome to the July edition of FAQs and RAQs!
Here we tackle client questions—some asked Frequently, others Rarely.
FAQ: Will higher tariffs lead to a recession and bear market?
Short answer: Nobody knows for sure.
This is the first time in generations that investors have had to navigate a tariff environment this intense, leaving the outcomes uncertain.
Much of the debate centers on who will bear the cost. Will it be U.S. consumers, businesses, or foreign sellers?
Our take: likely a mix of all three. Add in a healthy dose of noncompliance and shifting consumer behavior, and the impact may be diffused enough to avoid triggering a recession. That seems to be the message from the stock market, which has mostly shrugged off tariff concerns.
Also worth noting: While we don’t recommend making investment decisions based on political predictions, it’s hard to imagine policymakers pushing tariffs so far in an election year that it spooks markets and erodes consumer confidence. Just ask Teddy Roosevelt (image above)!
Bottom line: Think of tariffs like a stone in the market’s shoe. We’ll still reach our destination. But it’s all the market can think about—and it complains the whole way.
RAQ: Can I divide a Donor Advised Fund (DAF) into multiple funds?
This comes up occasionally, and it’s a smart question.
Short answer: Some DAF sponsors allow this, but policies vary. Check with your sponsoring organization to be sure.
Why might someone do this?
A family might want to build a giving legacy. For example, parents could carve off a portion of their DAF for each adult child to advise separately. Upon the parents’ passing, the remaining fund could be combined with the children’s, preserving intent and encouraging generational generosity.
It’s also a clever way to relieve some pressure on the kids’ monthly budgets if they’re already giving charitably.
As always: The details matter. Be sure to consult your DAF sponsor, financial advisor, and tax preparer before moving forward.
Have a question?
Drop us a line at carlsongroup@rwbaird.com. We’d love to hear from you!
All investments carry risk, including loss of principal. Past performance is not a guarantee of future results.