Long-term impact New U.S. tariffs imposed by President Donald Trump It may not be clear, but the short-term impact is leading the downturn in the U.S. market.
After entering the bear market this morning, the S&P 500, the benchmark for U.S. stocks, jumped temporarily after a 90-day tariff pause surfaced. White House Posted on X The tariff pause was “fake news” and the stock index fell again. The Dow Jones industrial average fluctuated similarly, down 1,700 points this morning, then jumped 800 points, and then fell again.
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“Businesses plan in the chaotic tariff environment created by the Trump administration is very difficult,” said Robert Johnson. Economic Index Employees Professor of Finance at Creton University Hyde Business School. Usually the market Response to tariffs negativelywhich is tax on imported goods, often pushes consumers’ prices and kills global trade.
Upgrade at the same time Tariff threat The erosion of consumer and business confidence, cutting federal labor is causing households to curb spending and spark concerns about a recession. “This could lead to a slowdown,” Johnson said.
Many other factors also cause volatility in the stock market, such as inflation, Interest rate forecast And worry about the increase in military conflict. Wall Street is on The Fed maintains its benchmark interest rate March 19 stabilized, but forecasts for higher inflation and lower economic growth in 2025 then lowered stocks again.
“The stock market is affected by reality and perception,” Miller Investment Management. “What people think is happening often has the same impact as the actual market conditions.”
Although the decline in the stock market may be large, it is also relatively normal. Stock markets have been recovering from steep drops, including the recent Great Depression and the Covid-19 collapse. If you are nervous about yourself Pension Fundjust like your state 401 (k)Or other investments, financial experts say don’t panic.
Should you “buy dipping sauce” because the stock is cheap?
There are a lot of chats on social media that encourage people to buy downward stocks now, also known as “buy dipping sauce.” However, stock prices may rebound temporarily, given the broader economic problems. Most financial experts recommend not changing your strategy based on the latest stock market rises.
I said, “Buying dips instead of focusing on building cash savings for emergencies or paying off unnecessary debt is one of the biggest mistakes I’ve seen during a downturn.” Bernadette Joymoney coach and personal finance expert.
If you have high interest debt, Joy says you shouldn’t focus on trying to use it in the stock market. Instead, turn to budgets and look for ways to reduce debt rather than make venture capital decisions. “Unless you intend to retire in the near future, your investment strategy should not change now.”
Miller provided similar guidance. “The best advice for long-term investors is to develop an investment plan and stick to it,” he said.
It is usually wise to avoid panic for sale. By doing so, you may violate the general guidance of your investment, which is to buy high prices at a low price.
Financial planners often recommend using what is called a dollar cost average strategy, where you invest a fixed amount each month regardless of market conditions. This approach removes some sentiment from investment, and even if you pay more when the market surges, it can allow you to lock in low prices during a decline in the stock market.
However, if you do choose to take advantage of the lower price, remember that the timing of recovery is unpredictable. “Even the average investor should consider ‘buy low prices’ when high-quality companies experience price drops for years,” Miller said.
What should I do if my 401(k) or investment loss?
While watching your investment shrink may be painful, changing your strategy is not always a safer option, especially if you’re a few years away from retirement. If your 30s to the early 50s, then time is right around you to ride out and play long races.
However, if you are retirement or you Plan to retire earlyMiller said you might want to deliver on a qualified plan to keep things built over the years.
Despite the historical record of stock market bounces after a downturn, retirees (or people close to retirement) may not be able to afford the time needed to recover. For example, after the bursting of the Internet bubble in 2000, the market began to surge, but the subsequent financial crisis in 2007-09 took a hit. The stock market did not fully recover until 2013.
The key is to protect your financial security. For example, as long as you do not withdraw funds from your retirement account, sell assets Within Qualified workplace plans, e.g. 401(k)s or irasno matter how old you are, it will not result in tax bills.
“By making your qualified program contribute aggressively until the market stabilizes, the effect is a little effective,” Miller said. This is a way to benefit from the upward momentum in the market while preventing nest eggs from any further Didi.
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