Market Turmoil

I spend a lot of my free time reading, especially newspapers, which may seem odd to you given the dramatic drop in newspaper subscriptions over the years. I subscribe to three digital newspapers, and their breaking news alerts—which find their way into my email account—keep me busy.

Lately, I’ve been bombarded with news about tariffs and the recent stock market decline. I have no idea how long this economic turmoil will last, and from what I’ve read, neither does anyone else. But here are three observations from the news that have caught my attention:

Don’t Panic: Ron Lieber points out in his New York Times article that the time to panic about how the new tariff policy will affect prices and the stock market might be when Costco raises the price of its $1.50 hot dog-and-soda combo. The price hasn’t risen since 1985, and Costco’s chief financial officer has suggested they will never raise it.

It Might Take a While: Edward Yardeni, President of Yardeni Research and successful at picking market bottoms, said that this usually happens after the Federal Reserve has taken action. But Jerome Powell, the Fed chair, has made it clear the central bank won’t intervene anytime soon until it understands the tariffs’ effects on the economy.

Don’t Miss Out: Diane Harris gives these eye-popping statistics in her column: “If you missed the 10 best days over the 20 years from 2005 to 2024, you would have reduced your returns by more than 40 percent, according to J.P. Morgan; If you missed 30 of the best days out of the roughly 5,000 trading days during that period, you’d have lost money, after inflation.”

Maybe the takeaway from these comments is that it’s best to sit tight and not panic. It might take a while for the stock market to bottom, but we could risk losing out on some of the best days to invest if we exit the market. We also don’t know how other countries will react to the tariffs, and perhaps the President will reverse course.

Rachel and I are going to continue doing what we’ve always thought was best for our money by following these simple rules:

Rebalance: When our preferred asset allocation shifts more than 5%, we will rebalance our portfolio. This way, our level of risk and return won’t stray.

Maintain Our Health: We’ll continue taking our morning walks, performing weight-bearing exercises, and eating a healthy diet because failing health and the cost of long-term care are greater risks to our investment portfolio than what is currently going on in the stock market.

Reduce Spending: We’re still planning on taking a couple of major trips this year. But if the economy ever gets extremely dicey, we would dramatically reduce our spending. That wouldn’t be hard to do because we’ve lived a fairly frugal lifestyle most of our lives, so we can have a comfortable retirement.