We’re not going to sugarcoat it; things are bad. Things are “pour a heavy glass of wine and look at my 401k portfolio while holding my breath and keeping one eye closed” kind of bad. So, what’s going on in the US stock market?
Trump’s 10% tariffs went into effect Saturday, and as of Sunday night, the S&P 500 had lost 15% of its value since President Trump’s Inauguration Day and had its worst performance since the start of the pandemic in 2020. When asked about the markets, Trump said, “I don’t want anything to go down, but sometimes you have to take medicine to fix something.” Not exactly the reassurance any of us were looking for.
We get it. Watching your long-term investments fall out of the sky feels like a punch to the gut, especially if retirement is just around the corner. But here’s one thing we do know for sure: Markets recover. They always have. They always will. The key is staying smart, staying calm, and staying invested.
Karen Finerman joined Jean Chatzky on the HerMoney Podcast to make sense of what’s happening in the US stock market and what you should be doing right now. Karen is a panelist on CNBC’s Fast Money, the CEO of Metropolitan Capital Advisors, and co-founder of our investing club for women, InvestingFixx.
The US Stock Market Hates Chaos, And That’s Exactly What We Got
Jean Chatzky: So Karen, what do you make of all of this?
Karen Finerman: The tariffs as they were rolled out were so far beyond what anyone expected. And there was some concern with the way they were rolled out and then what the actual math of it was. So, the US stock market hates uncertainty.
And rather than delivering any certainty on Liberation Day, what we got was another big dose of chaos. Over the weekend, we saw China hit back, so all of that makes people very nervous as well as concern about what this will do to the economy. I’m a long-term investor, and what I focus on is where I think we’ll be at some point in the future. And that’s almost always, I think it will be higher than here.
Tech Stocks: Why Strong Balance Sheets Matter Right Now
Jean Chatzky: Let’s talk tech stocks for a second. A lot of 401k millionaires have been made on the backs of the Magnificent Seven over the past couple of years. Apple, which we added to our InvestingFixx portfolio back in November of 2023, has taken a big hit. What are your feelings about the Maginficant 7 at this point?
Karen Finerman: I have a big Magnificent 7 allocation, so this has been a painful run, but there’s a lot that I like about the Magnificant 7. What I really like about the Mag 7, including Apple, is that these are businesses with significant cash flow and tremendous balance sheets. So they’re never gonna be forced to do something they don’t want to do or they don’t need to do, and that gives me a great deal of comfort.
Buy the Dip? Or Hold Your Cash?
Jean Chatzky: When stocks are really down, we can’t control these things. Are there other things that you think about for individual investors at times like this?
Karen Finerman: My inclination is to always be buying, but I think for some people who aren’t feeling quite comfortable enough, splitting the difference and buying some and keeping some in cash is the right thing to do. You don’t need to do all or none. I am always very long. So this has been a very painful period, but the VIX goes up, and I’m just nauseated, and then I cover some hedges. That’s what I did today.
… Does more financial confidence sounds good to you, then you might want to try:
🚀 FinanceFixx – HerMoney’s 4 or 8-week Money Makeover financial coaching program that will help you get your finances on track!
📈 InvestingFixx – HerMoney’s investing club for women who are ready to learn market lingo, and grow their wealth. Your first month with us is completely free!
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