Unlike the tariffs of Trump’s first presidency, this new round appears to have staying power—with potential to reshape global supply and demand dynamics. The 90-day pause granted to most countries offers a brief reprieve from immediate disruption but extends the timeline of uncertainty.
This article isn’t about the merits of tariffs or how they’re being implemented. It’s about how uncertainty—especially uncertainty like this—affects investor perceptions and decisions.
The Pitfalls of Uncertainty
We can’t control uncertainty, nor should we pretend it doesn’t exist. Decades of relatively stable global trade norms have been disrupted. Change is coming. Whether these changes will ultimately help or hurt the U.S. and global economies remains to be seen. In the short term, however, uncertainty—and the anxiety it brings—has clearly increased.
When outcomes feel important yet unclear, the brain instinctively seeks control. Often, we fall prey to the illusion of certainty. Biases flourish.
- We confuse confidence for competence.
- We search for confirming information.
- We spot patterns in randomness.
- We act—because doing something feels better than doing nothing.
The problem? Decisions fueled by bias may feel right but are often wrong. Research consistently shows that bias-driven decisions lead to lower investment returns.
The Impact of Withdrawing Guidance
Amid the tariff uncertainty, many companies are pulling their forward guidance. Some investors may view this as “the last straw” and head for the exits. Without guidance, markets may feel even less predictable in the short term.
But here’s the twist: psychologically, removing forward guidance may be one of the best things that could happen for long-term investors.
Why do investors need forward guidance anyway? Isn’t guidance—typically focused on the next quarter or two—just another tool that encourages short-term thinking? And is short-term thinking what you want for your clients?
You’ve developed a thoughtful plan and strategy tailored to your clients’ needs and goals. Should that plan be derailed just because a company is uncertain about its next quarter? Forward guidance invites long-term investors to fixate on short-term outcomes—and that’s rarely productive.
Why No Guidance May Actually Be Good News
If your clients express concern about companies dropping forward guidance (and many won’t), consider reframing the conversation:
“Frankly, I hope they never provide it again.”
That’s not blasphemy—it’s sound behavioral advice. You own quality companies based on a disciplined strategy, not because of near-term forecasts. If anything, eliminating forward guidance helps keep the focus where it belongs: on the long term.
If investors bail because guidance is gone, it reveals they weren’t true investors to begin with. They weren’t thinking like owners in companies—they were treating stocks like bets in a casino.
When framed properly, the absence of forward guidance can be a gift to the behavioral advisor and their clients. It removes a major distraction, helping investors stay aligned with their plan and focused on what matters most.
Related: The True Test of Behavioral Finance: Coaching Clients When It Counts