President Donald Trump’s tariff policies are sending stock markets lower around the world and experts are offering some time-honored advice about what to do.
If you have decades ahead of you until retirement, the best course is to leave your 401(k) alone, according to Fortune.
The worst thing to do is act rashly, writes Christine Benz, director of personal finance and retirement planning for Morningstar, a financial markets research firm, Fortune said.
“Resist the urge to shift out of stocks entirely,” Benz wrote. “Such a move could buy you some short-term relief, but it will soon be replaced by another nagging worry: Is it time to get back in?”
Most market gains are made in just a few days every year. If you leave the market and try to time your way back in, you’re likely to miss the upswing, according to Fortune.
“If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half,” Hartford Funds wrote, according to Fortune. “And missing the best 30 days would have reduced your returns by an astonishing 83%.”
Experts advise diversifying your holdings, including by choosing some investments in international markets, according to Fortune.
It’s also important to make your portfolio more conservative over time, experts say. That means if you’re close to retirement age, you should have less money in stocks and more in bonds and other more stable investing options.
But even retirees, especially in the early years of retirement, should have some funds in stocks since they’ll likely need their money to keep growing and last decades after they stop working, according to The Associated Press.
“It is hard to roll with the punches when some days you feel like your portfolio is being pummeled,” said Brian Jacobsen, chief economist at Annex Wealth Management, according AP. “But those moments should pass. A diversified strategy that is thoughtfully adapting to changing circumstances can’t prevent the punches, but it can help soften the blows.”
Trump announced tariffs of at least 10% on a broad array of U.S. imports and trading partners last week. Some of the levies were much higher.
Economists have said American consumers are likely to face higher prices as a result.
Trump and his allies have argued the tariffs will lead companies to move manufacturing back to the United States to avoid the new taxes. The end result will be more jobs and more investment, Trump has said.
“What’s going to happen with the market? I can’t tell you,” Trump said aboard Air Force One on Sunday, according to USA Today. “But I can tell you, our country has gotten a lot stronger, and eventually, it’ll be a country like no other.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump said. “We have been treated so badly by other countries because we had stupid leadership that allowed this to happen. They took our businesses, they took our money, they took our jobs, they moved it to Mexico, they moved it to Canada, they moved a lot of it to China.”
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