After years of expansion market profits, it is surprisingly clear. The market can fall quickly.
U.S. stocks plunged Thursday after Trump’s “liberation day” tariffs exploded through markets around the world. And tariffs are not the only factor investors and savers are navigating at the moment.
There is uncertainty that stirs the stomachs that millions of workers are working on while unemployed. There are unforgettable concerns about Social Security and its future. The Social Security Director warns that the massive staffing planned by the Trump administration could potentially be at risk of missing out on payments to seniors for the first time in history.
Gas prices are rising, and economists are openly warning of a recession.
The news is coming to us quickly, and if you’re like me, you’re worried.
I asked some financial advisors what they were telling their clients about how to manage their money in these unpredictable and unprecedented times.
read more: Trump’s Tariffs: What They Mean for the Economy and Your Wallet
There is a long way ahead, and in itself can be a distraction. Lisa Ak Kirchenbauer, Senior Advisor and Founder Omega Wealth Management In Arlington, Virginia, Yahoo Finance, the most important questions we can ask are:
She said it is critical to know what the real concerns are for you and your family. “Then you can think about what actions you can take to navigate it.
Sometimes the best strategy is simply to sit in your hands.
“Volatility is often just noise,” she said. “Staying your investment and strategic adjustments rather than being emotionally responsive will lead to stronger, long-term outcomes.”
“It’s important to anticipate that tariffs could be carried over as prices for internationally manufactured goods purchased by retirees rise,” Real Wealth Coterie financial planner and founder Lazetta Rainey Braxton told Yahoo Finance. “This type of inflation directly affects households, so savers need to have a disciplined approach to wealth management.”
One of our current priorities is having a cash “cushion account,” she said. “This is an important safeguard that will help you navigate inflation, work transitions, sabbaticals and unexpected opportunities. These preparations provide stability and flexibility in a ever-changing geopolitical and economic environment.”
Braxton monitors stock and bond markets domestically and internationally through the lens of geopolitical and economic development, but her investment philosophy is simple. It focuses on building long-term wealth through investment and diversification of passive indexes. A mix of US and international equity and bond funds, as well as real estate.
How many years have you been planning to retire? That number is the key to the movement you’re making now.
“It’s a mistake that a lot of people make when the market is low,” John Anderson, a certified financial planner at Chicago-based Equitable Advisors, told Yahoo Finance. “If you still have a few years to retire and you are an individual who may be running the majority of your retirement savings on a vehicle through an employer like the 401(k), you continue to make those systematic investments while the market is decreasing before it drops.
Anderson is a spot.
If you are automatically investing money in an employer-sponsored retirement plan or IRA, you are investing when the market is ripping and when there is tanking. This means that the return on investment will be uniform over the long term.
If you seem to be a lot of retirement savers and invest in a target date retirement fund, your account is automatically adjusting the market rotation.
With Target-Date Date Retirement Fund, you choose the year you want to retire and the year you want to purchase a mutual fund for that year (such as Target 2044). The fund manager then splits stocks and bonds, usually both the US and international investments, and changes its balance to a more conservative blend as the target date approaches.
Have you retired within 3-5 years? Please listen.
“If you’re a little closer to retirement and are in a position to build that nest egg, it’s good to work with your advisor to see if there’s a strategy or product out there that will protect you from downside loss,” Anderson said.
“Generally speaking, you might want to move to a less risky portfolio by diversifying your stocks and diversifying into bond holdings.”
That’s solid advice and it matches what I’ve heard from many of the pros I’ve spoken about. When you’re away from a stable salary. Or, if you’ve already retired, you’ll need at least five years’ worth of living expenses in a combination of high-yield savings accounts, CDs, money market funds and high-quality bonds.
Kirchenbauer said today’s high prices have once again made cash, treasury and bonds attractive. “Currently, 4% to 5% revenues are available for low-risk investments such as the Treasury, CDs and Money Market Accounts. Investors have the opportunity to gain competitive returns while waiting to make it clearer inflation and rate reductions.”
Please see more High-yield savings account, Money Market Accountand CD account.
“This is the time to meet with your advisor and review your portfolio,” Kimberly R. Stewart, certified financial planner at Ameriprise Financial in Orlando, told Yahoo Finance. “These are key factors in determining how assets are invested and allocated. The goal is to ensure that portfolios are properly allocated and diversified based on investment goals.”
Financial advisors generally suggest rebalancing (adjusting the stock-bond combination) every time a portfolio moves more than 7% to 10% from the original asset allocation. To roughly determine the proportion of your portfolio, you should subtract your age from 110 if it should be in stock. Therefore, a 60-year-old has 50% stock and the rest has 50% bonds and cash.
“They make mistakes that many individuals make,” Anderson said, “They don’t review their portfolios consistently enough and can become vulnerable when they distribute funds from these accounts in the downmarket.
It’s time to place some of these good habits. As Kirchenbauer told me, this is just the beginning.
“There are more ups and downs, interactions, more uncertainty before it becomes clear,” she said. “As a skier, I think this way. This is not when the light is ‘flat’ and you can’t actually see it in front of you, but a little further away you can see the outline of the slope. Skiers know that they need to bend their knees to slide flat light and focus far away below the hill.
“This may be everything we can do right now. We are still flexible and looking ahead.”
There are 2 cents along these same lines. When riding to ride a horse, first focus on the jump, raise your eyes and look away, keep your pace steady and always move forward.
Kelly Hannon is a senior columnist for Yahoo Finance. She is a career and retirement strategist and author of 14 books.Controlled with 50+: How to succeed in the new world of work.” And follow her, “Don’t get older to be rich.” Blue skiing.
