*

Investors were prepared for market volatility, but not of

such

magnitude

*

Tariffs impact corporate earnings, increase recession

risk, say

investment officers

*

Diversified portfolios recommended amid uncertainty,

potential

retaliation from other countries

By Suzanne McGee

April 3 (Reuters) - Investors had been prepared for a

shock heading in to U.S. President Donald Trump's announcement

of sweeping new tariffs on Wednesday, but many said that what

played out was the worst-case-scenario for markets. Their

message: Buckle up and brace yourself.

In the run-up to what Trump had billed as "Liberation Day,"

investors had sought to remain optimistic that clarity about the

administration's tariff policies would help the volatile U.S.

stock market stabilize.

But following Trump's unveiling of what some said were

larger-than-anticipated tariffs - and in the midst of the market

selloff that followed - many of the same individuals said their

main takeaway was a sense of heightened risk and plenty of

unanswered questions.

"This is bigger than I expected; bigger than anyone really

expected," said Mark Spindel, chief investment officer of

Potomac River Capital. "And the market is reacting accordingly."

Global markets tumbled on Thursday, with the dollar and U.S.

stocks among the hardest hit on fears that a broadening trade

war would push an already fragile world economy into recession.

Reuters talked to a range of investors over the last week,

before and after the announcement. Here are some of their

views:

MARK MALEK, CHIEF INVESTMENT OFFICER, SIEBERT FINANCIAL:

Before the tariffs announcement: "There's more potential

downside than upside right now."

After the tariffs announcement: "Brace yourself, because

here comes the downside. This is a lot more than the market was

expecting, if you look at the size of the tariffs. This is going

to have a material impact on corporate earnings. I can't imagine

any company isn't recalibrating earnings expectations for the

full year."

MICHAEL ARONE, CHIEF INVESTMENT STRATEGIST, STATE STREET

GLOBAL ADVISORS:

Before: "There is potential for more volatility on April 2

and post that deadline. I am still skeptical we will get

clarity."

After: "Clearly, markets are still unhappy with the current

trade policy. And everyone is still on hold - businesses,

consumers, the Fed - to see how things play out. I think

anything that offers a hedge against inflation risk should do

better, such as gold and hard assets."

ANGELO KOURKAFAS, SENIOR INVESTMENT STRATEGIST, EDWARD JONES

Before: April 2 will probably not "completely really clear

out all the uncertainties that potentially still remain."

After: "The takeaway is that the tariffs announced are

closer to the more aggressive side of the spectrum. The

uncertainty will remain. How will other countries respond? Some

uncertainty will linger in the weeks to come as this plays out.

It just is reinforcing the benefits of a diversified portfolio."

MARK SPINDEL, CHIEF INVESTMENT OFFICER, POTOMAC RIVER

CAPITAL:

Before: "I think the market is really holding its breath and

... trying to convince itself, maybe incorrectly, that we've

seen the lows."

After: "The market's initial reaction just underscores the

fact that the tariffs are huge. If we thought this was the end

of having to think about tariffs, we were wrong. We don't know

what went into Trump's spreadsheet calculations of these rates.

But the bottom line is that this is inflationary, and the odds

of a recession have gone up."

JASON BRITTON, CHIEF INVESTMENT OFFICER, REFLECTION ASSET

MANAGEMENT:

Before: "Whatever comes next may lack detail and specificity

and that will drive the market crazy. But there's a chance we'll

end up with a sigh of relief in spite of more volatility."

After: "If you really parse the information, I think people

will digest this and see it as a mixed bag, probably not as bad

as it has been portrayed. If the big tech companies sitting on

enormous amounts of cash are going to get pinched, I'm a buyer

on weakness. It's just the market over-reacting and I'm happy."

ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH:

Before: "I think they're going to start shifting gears and

move from tariffs ... There will be more emphasis on the tax

talk."

After: "Taxes may be the next thing he (Trump) thinks about.

But tariffs unfortunately don't seem to be going away soon as an

issue. What will other countries do in retaliation? How will

this affect U.S. corporations and U.S. consumers? It's going to

be difficult for investors going forward; I expect the

(volatility index) to starting moving even higher, possibly

above 30."