Opinion
By Steve Nicklas, 4-6-25
The tariff tantrum has escalated from a temperamental hissy fit into a full-blown emotional meltdown within the financial markets.
As markets hemorrhage across the globe, there are tried-and-true guidelines for investors to navigate the wreckage. There are no guarantees; but there is precedent, and hope.
To set the table, the U.S. job market is robust right now. Some 220,000 new jobs were created in the private sector last month. Unlike with the prior administration, these valuable jobs were not of the useless government variety.
While investors fear an oncoming recession due to the economic fallout from the Trumpian tariffs, there is no concrete evidence of this. And with anticipated tax cuts and regulatory reform and reduced fuel prices, a recession seems even more unlikely, in the opinions of my favorite financial pundits.
Here are some guidelines to help you:
1-Try not to panic. Decisions driven by panic are rarely fruitful. They are based on emotions, not sound logic. Corrections, defined as declines of 10 percent or more, occur about once every year in the U.S. stock market. The current declines are approaching 20 percent off the all-time highs, nearing a bear market.
2-Bear markets rarely occur without a recession. This is why the recession talk is so relevant. And to complicate matters, bear markets normally last longer than corrections — but are less common.
3-Be wary of the financial information you are getting. Most of the financial media has turned hard left like the mainstream media — and opposes Trump. Even the esteemed “Wall Street Journal” posed a sensational question asking how much Trump understands finances.
4-Don’t watch or read too much financial news. In addition, don’t dogmatically follow your portfolio on an hourly basis. Many investors won’t even open their statements after a bad month. A do-it-yourselfer conducting worthwhile research is a different thing. And don’t respond to every sound bite from a temperamental media.
5-If you see a story online or on TV, the news is likely priced into the market. That’s what the market is — a living valuation machine. Investing is emotional already. But emotionally charged decisions ignore important elements like fundamentals of a company.
6-If you own stocks, either directly or through mutual funds, money managers, your 401k, etc., you probably need their long-term growth to meet your financial goals. So try to stay the course. However, volatility is a part of equity investing, like it or not.
Ironically, the average investor underperforms the broad stock market. Research of the markets conducted by Dalbar shows this. It’s due to bad timing — freely investing when the markets are soaring, then pulling back when they decline. You have to be counter-intuitive to be successful.
After all, don’t forget the old adage — buy low, sell high. Like a financial reflex. Those who do the opposite are destined to fail. And suffer tantrums along the way.
Steve Nicklas is a Chartered Retirement Planning Counselor and a veteran financial advisor in Nassau County. He has taught “Investing in Today’s Financial Markets” at the Nassau County Council on Aging, as well as at Florida State College in Yulee. He also was an adjunct instructor at the University of North Florida. He is an award-winning columnist, and has written a book of his financial columns, All About Money, which is available on Amazon . He can be reached at 904-753-0236 or at [email protected].
The views expressed in this commentary are those of the author and do not necessarily reflect the official position of Citizens Journal Florida
