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I searched and searched the forum for a post about what HD readers are doing in response to the effect of the uncertainty of tariffs on the stock market but I found nothing. It’s as if the markets did nothing today. So, please tell me what you are doing regarding your investments in the face of this unprecedented economic assault on the world economy by someone who just discovered the quaint notion of “groceries”.
when the mkt is up 5% in May historically since 1950 the yearly return every yr since is around 20%. read it at Barons
Recent heavy rain stopped and the sun is out here in the Sonoran Desert (which is reputedly the greenest desert in the world).
One of the challenges of a desert is the soil composition, which is generally not good for load bearing (aka ‘sinking sands’). The previous owner of this house added a carpet in an attempt to obscure a sinking room. LOL. They tended to use a lot of paint too! “If you won’t fix it, then attempt to hide it” must have been their motto. We hired a specialist firm to install four steel piers. They went down 20 ft and 35 ft before hitting anything solid. Work was completed before yesterday’s heavy rain (monsoon season begins in 12 days). After installing the piers and a lift, poly-foam was injected to stabilize a 12×16 ft slab.
I keep busy with other things so as to avoid the daily market noise and so I have done nothing, although my automatic stock purchases continue using DRIP.
Perhaps I’m a contrarian. I posted today elsewhere in the HD:
“The S&P 500 closed May with a monthly gain of 6.2%, the largest since November 2023. However, Morningstar published an article today ‘Has the Stock Market Reached Peak Optimism on Tariffs? – Strategists say equities have already priced in the good news on tariffs as the trade war grinds on….’
As of today (June 3, 2025), SPX index 200-day simple moving average is 5787.75, with the most recent change of +2.51 (+0.04%) on June 2, 2025.Over the past year, SPX index 200-day SMA has increased by +1009.50 (+21.13%).SPX index 200-day SMA is now at all-time high.”
Staying the course and not making any changes. I know it’s boring, but it’s worked for us for forty years
Well, I finally looked at my balances. Nothing to do (still well within my rebalance trigger %).
If I’d been glued to the finanial media, I’d probably have panicked done something dumb. But I’ve been imbibing the wise words here for a couple years, so with plans and asset allocations in place, it is time to just sit tight. Thanks, all.
“I’m just sittin’ here watching the wheels go round and ’round…”
I just did something. I was thinking of doing it anyway, but the tariffs were an additional incentive. I bought a new iPad. I replaced my basic, wi-fi only, 128 gig 6th gen with the same basic 11th gen. The 6th gen was old enough and looked used enough I didn’t get a trade in allowance. The old one cost me $331 six years ago, the new one cost $349. Pretty cheap on an annual basis.
Now I need a new desktop, as mine is too old (2015) to run Windows11.
Update: the new iPad is slightly wider, and thicker, than the old, but weighs the same (right at a pound, according to Apple). However, I can’t find a case that only covers the front, and cases that cover both back and front weigh at least half a pound, so the new one is 50% heavier than the old. Since I couldn’t trade the old one in, I will keep it for reading in bed, and taking on trips if I ever travel again, and hope the battery will last a while longer.
Just out of curiosity, why do you use a laptop and desktop? I know many people do the same.
I have a large iPad and find with a keyboard I can do anything I would do on a desktop. I gave up the desktop years ago. I also found using the hotspot on my phone the iPad is good anywhere.
I have a Windows desktop, a basic Apple iPad and a Google phone. They are not connected, and the phone is not on my personal network. All my financial data is on the desktop. I use the phone for calls, texts, maps and some web activity if I’m out. I use the iPad for most other things, unless I’m doing a lot of typing or want a bigger screen. Remember, I am an ex-techie who worked on early networks and who highly values privacy.
Well done Kathy. I replaced my 10 year old MacBook Air about 6 months ago. The old one still worked well, but the battery life was getting quite short. I had replaced the battery twice in the previous 10 years with no issues. I bought a new battery, but when I went to install it I damaged the connector on the power board. I checked with a local Mac repair shop about getting a replacement connector but they basically laughed at me. So I bought a new one. The old one still works when plugged in. The new one is better, faster, with more memory, and cost about the same as the 2015 version. The cost of consumer electronics, especially considering the increase in performance, is an amazing economic story.
We did the same last year as I our old laptop’s. operating system was no longer going to be supported by Microsoft. We got a great deal at Best Buy during Amazon Prime Day as I knew they would be competing. Then a few months later replaced my almost 5 year old IPad as it did not have sufficient memory to be updated. My wife uses the old one for her recipes when cooking. The wife got a new IPhone for Xmas as she wanted a new camera 🤷♂️, and I couldn’t think of anything else to buy her. Im keeping my IPhone XR though as I see nothing wrong with it.
We bought a Mac a couple of weeks ago. It’s pretty cool. If you have an iPhone to go with your new iPad, you can sync across devices if you want.
We dropped the cell ability on the iPad as I only use it during vacation and always have my iPhone as well and you can piggyback off your phone’s cell connection. Saved $10/month on Verizon Wireless bill.
As Benjamin Franklin said,”a ten dollar bill saved is ten dollars earned.”… or is it….
With uncertainty comes volatility. Those in the accumulation phase have no worries. Retirees heavily in to equities might be losing sleep, Know the Bucket Strategy in Retirement
We used yesterday’s market plus surprising interest rate bounce to rebalance ~0.7% of our portfolio from stocks to bonds. Admittedly this is a tiny tweak to a portfolio that is still heavily-weighted in equities.
In late March, one of our Humble Dollar friends and I had been chatting separately about portfolio allocations. This secret Santa kindly convinced stubborn me to take a few percent of our “enough” equity exposure off the table – a small rebalancing based on my sage friend’s advice. In hindsight and considering Buffett’s actions, I shouda done more.
Thus, we’ve recently tweaked the portfolio in a slightly more conservative direction at the margin, but have not made any huge moves.
This is how 401(k) investors are moving their portfolio around in this market. That is human nature.
https://finance.yahoo.com/news/the-market-pummeled-401k-accounts-last-week-panic-selling-ensued-121625101.html
Too bad they missed out on today’s gains.
Yippy was the mood….
I guess yippy is the opposite of yippee.
Tax loss harvesting and rebalancing.
For those contemplating a Roth conversion this could be an advantageous time.
I’m retiring August 1st. I had a 2002 Tahoe and was looking to purchase my new retirement rig later this spring. Due to the tariff talk, I actually purchased it in January. I’ve also been lucky enough to never have a need for a personal smart phone – always had a company phone with the perk that I could use it for personal use. A friend who works at the local Apple store told me she would get me an employee discount when ready. Again, I was looking at a May purchase, but made the purchase last Thursday and picked it up Saturday. No other plans at this time.
I first posted in response a couple of days ago. I almost didn’t respond because of the politics embedded in the post. If anyone wants me to delve more deeply into “why” I am doing nothing and what might change my mind, then ask.
What would change your mind about doing nothing, and what do you think you would do?
What would change your mind about doing nothing, and what do you think you would do?
Thanks for asking. I’ll confine my remarks to stocks. First, it is important to note that I don’t have to do anything. This considers my current situation and portfolio. I’m retired, taking annual withdrawals and practicing what some would call Wealth Defense.
What would change my mind? Two activities to consider: (1) To buy and (2) To sell.
I’ve posted that stocks remain at high valuations according to several well-known metrics. That is as of April 8. Some sectors are higher than others. [Note: At 19.8 the S&P 500 forward P/E ratio is above its longer-term average of about 17.0.]
Overall, the S&P is higher than I prefer for buying “on the dip”. The Schiller S&P 500 CAPE ratio was 30.74 on April 8. In the last 10 years the low of 24.00 was achieved in January 2016. I’d become interested when the index is within the “fairly valued” range. That range is historically between about 16.0 to 30.0.
I have “bought on the dip” in the past, but was usually too eager. Fear of missing out is to be avoided and I discourage any attempt to time the low.
Would I sell? I have no need to sell. Several of the stocks I own have not met my expectation for the company that I set at time of purchase. It is not about the price of the stock. It is about the company. I would consider selling them and purchasing something else to replace them.
Would I buy? The S&P 500 index is approaching the upper bound of the range that some define as “fairly valued”. I’m not inclined to buy the index if above that range.
I have of list of potential purchases and the price at which I would purchase. We aren’t at a price I’m willing to pay for those companies (yet).
I’ve been doing nothing in the markets, both over the last few days and for the last several years. With my basket of equities (a tax consequences issue) and asset allocations, inaction has worked well overall. I will, however, begin to reinvest the dividends of individual holdings this week. Reinvesting requires only a few clicks on my account page, and feels like a easy way to buy over time into what may be market lows.
Many of the comments below are political — to be avoided here at HumbleDollar. Please confine yourself to Nick’s question: “What you are doing regarding your investments?”
Glad you’re moderating this site against the all too-easy tendency for some to revert to complaining about whatever the red party or blue party does or wants to do. Thanks for keeping this site free from that commentary!
Thank you, Jonathan. I was beginning to feel like I do when I watch the Nightly News. All opinion and no substance
I’m getting close to retirement, or at least semi-retirement with decreased hours to keep up the mental stimulation and camaraderie but with more free time. As I have a defined benefit pension, though frozen without additional funding since 2016 (which instead went to a defined contribution pension), I’ve maintained a pretty high equity portion of my investments. Even with the recent drop I’ve probably come out ahead because of that, but that doesn’t mean it’s not painful to see the drops and it makes me worry about the sequence of returns risk.
A big concern is the extreme volatility and how long it takes the company retirement manager to make changes. If, for example, I want to sell from my main company retirement account investments and put it in my external brokerage account to increase my investment options, it may take up to 10 days. I don’t want to trade increased options for locking in a bigger paper loss than I expected.
The one silver lining with the market tanking is that this may be a good time to do Roth conversions on retirement accounts so I can pay tax on a lower amount. But again with the delay in it happening and the volatility I could end up paying a lot more taxes than expected (when I’m still at a fairly high tax rate) if there’s a bounce when the order goes through.
The forum is always interesting. Staying the course seems to be the consensus. The unavoidable snide political remarks are entertaining while adding little to the utility of the forum. Preparing for and anticipating changes, and sticking to a plan would appear to be the best way to avoid the expected human behavioral responses to political and financial changes. I’m old enough to have lived through a few of these times and it has served me well. Self discipline is a never ending endeavor.
The unavoidable snide political remarks are entertaining while adding little to the utility of the forum.
Actually, I’d go so far as to say that the partisan political remarks in a comment are avoidable and wearying, and they detract from my interest in reading it.
I’m adding. I view the actions by Trump as a long-term positive addressing issues that have long been ignored. I have confidence in the team Trump has assembled and find the arguments by Scott Bessent comforting and compelling. The short-term is anybody’s guess, but long-term I’m increasingly optimistic. Although I don’t like Tucker, I thought this interview was excellent:
https://www.youtube.com/watch?v=zLnX1SQfgJI&t=3s
So far I’m up 20%+ since I mentioned “I’m adding”. Sometimes it’s better to be lucky than good.
He talks and says nothing. “Reindustrializing” will take many years, decades. In the meantime proposed tax policy will explode our deficit.
Ask how long the “transition period” will last.
Still nobody explains how economically isolating the US will bring us back this promised wealth in the 21st century.
This is not the 1950s or even 80s. China is no longer a developing country. We retreat and China advances to fill the void.
We live in a connected global economy and that won’t change.
I have searched publications and economists from around the world trying to find one that supports this strategy. I have yet to find one.
Well said.
Instead of a team of rivals such as Lincoln assembled, Trump has assembled a team of sycophants. A recipe for financial disaster, not just for the US, but for the world’s economy.
I am reading a novel set in 1933. One of the characters says: “It’s the measure of a leader, which men he picks for the next tier of command….”
I’m reading a story being written in real time of overly emotional unpleasant people. I don’t belong here. I wish you all the best.
I’m sleeping like a baby. I have 50% of assets in a treasury bond ladder, CD’S and Money Market fund. The other 50% is in dividend paying stock ETF’S. I also have rental property income all mortgage free. I retired last year at 55. No worries here.
I’m doing mostly nothing. I have enough cash and time to wait it out, and I fully expect this disruption will ride itself out and we’ll be back on a positive path forward within 12 months. The only thing I’ve identified that I need to watch is my SEP/IRA RMD distribution. I’ll have to sell more fund shares now each month to reach the mandated minimum withdrawal number, and so I will be seeing a small impact there. But my funds are still way, way ahead on a historical basis. In fact, when I do comparisons, they are about where they were a year ago when I was shocked that the S&P 500 hit 5,000, and even then, they were on a roll where I (like most investors) had lots of prior gains. So, I still think I am playing with house money, and I have lots of patience as a result.
HD readers seem quite confident they can handle the crash based on their investments and withdrawal strategies.
I doubt that is a widespread state of affairs.
And then we will be we are facing more inflation.
Market crashes tend to cause deflation not inflation, unless what you’re really saying is that this is going to cause big govt spending? (this is just math, lower prices, less money in circulation, chasing the same number of goods leads to lower prices)
Tariffs, tax cuts
Except you forgot the part where everything made outside of the US is now some 25% more expensive, and will lead directly to higher costs for consumers over however long these tariffs last. I’d call that inflationary. And you know who also calls it inflationary? The head of the Federal Reserve. I think he has an idea of what he’s talking about.
Things change fast, do you think there’s any possibility that there will be changes in the next month, rest of the year?
Change isn’t as fast for international supply chains. We will feel the effects of this even if they yank the tariffs in a month or three
It’s more than a possibility but who knows what brilliant strategy will befall upon us.
About 2 weeks ago I moved half of my wife’s and my 403(b) stock funds into federal funds. This week I sold most of the stock in my brokerage account and bought short term treasuries. In both cases, we sold with net gains. I know we’re not supposed to time the markets, but I expect a lot more down side before buying back in. Except I didn’t change the allocations of new money that goes into the 403(b)s; they will continue to buy stock. I think the current government is destroying expectations that markets need to succeed.
The biggest problem that I see with your plan is how will you know when the market hits the bottom and get back in?
What I did during the COVID crash and am doing now is small changes based on numerical values. During the COVID crash I increased my equity position by 5% at correction, bear, and 30% decrease, then sold as the market rebounded based on the same parameters. I made these changes realizing I could not predict the bottom so I partook in measured changes. I made some decent money by being analytical, not emotional, or greedy.
Recently I have been performing dollar cost averaging Roth conversions by converting equal amounts monthly. This past Friday I moved three months of Roth conversions up to the present due to the fund share price being down 10% from its peak. This allowed for increased shares to transfer due to the decreased share value. If the fund decreases to 15% drop will move forward another 3 months of conversions. Steps I was going to take anyways just moving them forward to take advantage of the current market decline. Since the converted funds were in a target date fund and will be changed to Vanguard Total World stock fund and the money will now be in a Roth account rather than a traditional IRA I will be increasing my equity position.
Capitalism has a limited shelf life anyway, why not find out sooner than later? 🤦
And why is that?
I was being facetious, but realistically it would happen due to limited resources. Growth must always come to an end in a finite world.
Interesting take on that here.
“…what you are doing regarding your investments?”
Relaxing, just a few weeks after getting my first SS check at 70. <grin> Those checks will cover all my expenses while I kick-back in this paid-for house in a scenic Low-COLA region.
Did the market have a bad week or something?
Just kidding; it’s still interesting to me, but I did enough right in the accumulation years to not have to care what it does now. I’m 40/60 stocks/bonds, more conservative than necessary – call me chicken, or paranoid, or whatever, given that I really don’t have touch any of it to get by.
My motto is, the bonds are for me and the stocks for my survivors – but they’re likely to get a good chunk of the fixed income also in the end. And very nice Christmas presents until then. 🙂
Life is good, even if ever shorter.
How many of us believe SS will continue, how many of us are concerned it will end, and who amongst us think it may continue at a reduced amount in a privatized form?
“How many of us believe SS will continue”
Trump has already told us he will do nothing to negatively impact Social Security. IMO, what he means is he will do nothing to Social Security, period. While he will not negatively impact the program, he won’t make it more secure for 2035 & beyond, either.
As most others here, I’m doing nothing different due to the crash. We have reasonable income from a pension and social security. On the other hand, we’re in the midst of buying a house, so it’s definitely different than all of the previous market pullbacks we’ve experienced. We’ve reduced our 50/50 portfolio (50% equities and 50% cash and muni bonds) to 50/10 as we’re using a lot of cash and bonds as our down payment. We have a small townhouse that we’ll sell after we move in. It’s mortgage free so that money will replace the down payment in our portfolio.
it shouldn’t make any difference, but the market crash in the middle of this sequence is more unsettling than it would be otherwise.
It was a pretty dramatic change of events and various Talking Heads have given advice about what to do. Some people may need money in the very near future like an annual withdrawal required from an investment account; if the market continues to go down, which is likely; it can be better to take The known versus the unknown. Sell and await a change in the market fundamentals.
It made me think good deal about parents who saved for college only to see their college funds substantially reduced, and their child going to college in a few months. Or even retirees living on a 401(k) with diminished value. They may need to make decisions that they few they can accept if the market volatility continues which for now is highly likely. Wall Street of course has a vested interest into NOT recommending going to cash but to hold the course. It is easy to say when it is not your money.
I am most concerned about this earning season, which begins reporting next week and runs for at least 30 days. All CEOs will be coming out with reduced projected earnings for the full year and the effect they believe tariffs will have on their business. I can’t see how any of that news is positive for the market. And if the tariffs continue, which seems to be likely at least in the near term of several months, I think the second quarter earnings will be even more damaging and reduces the likelihood of a market recovery prior to mid summer. Higher Inflation and consumers that CLOSE their wallets is certainly going to be observed.
For that reason alone, it may be best to sell and await a more investable market after second quarter earnings are reported. It is pretty apparent without MAJOR tariff reversals we are already in a bear market and recession. We just needs the official numbers after the passage of time.
I will offer this advice. I would get back in the market only when the stock chart fundamentals warrant and what I call an investable chart. Example of that would be the five day moving average more than the 20 day the 20 day above the 50 day and both the 20 and 50 day possibly above the 200 day moving average. At this time, none of that exists. We are just saw the 200 day moving average start declining which it is likely to continue to do as lower closing prices now replacing higher closing prices of 200 days ago. A declining 200 day moving average in the s&P 500 is a classic definition of a bear market.
I do agree with Professor Siegel who said this is the worst economic/tariff decision in 95 years.
good luck to all of us since we will likely need a healthy dose of good fortune.
I took a pension instead of a lump sum when I retired. Both my pension and social security are not correlated to the stock market. I don’t care what happens.
Because the P/E of the market is at historic highs I’m really not invested in the market right now. I have around 300K split between an IRA and a Roth IRA at Fidelity and another 100K at Janus Funds to make up for inflation. Most of it right now is in interest generating cash funds except for 50K at Janus Funds. The 100K at Janus had all been in their research fund but I moved 55k into one of their money market funds a few months ago to protect it from a downturn. I using it to make up for the 55k in my Fidelity Roth IRA that I’m going to use to pay for a new Honda Ridgeline medium size truck this coming week. I converted 25K into the Roth last year and another 20K this year. Since the money is in a Roth I can take it all out this year with out any penalty and it won’t count toward my income.
I had a solar panel system with two batteries installed at my house last year that I’m getting a 30% rebate on from the Fed’s. Those are tax credits that I can use to offset the Roth conversion taxes. If I don’t use all the credits I can save them for future years.
Don’t be so sure about that pension. Whoever is funding it cares a great deal about the stock market. If this disaster continues it could lower funding ratios requiring added contributions which could be a problem for some organizations.
Most of us take solace in having a source of dependable income in retirement, but not all those sources are equally safe and unaffected by broad market turmoil. Thanks for the reminder Dick.
That’s so true. I have two different state government defined benefit pensions (two different jobs), and while those payments are “guaranteed”, the ability for those payouts to continue rely on the returns in those pension accounts and the willingness of taxpayers to cover shortfalls over time. If Trump sustains his insanity for the next 4 years, and a third term (haha), then ALL BETS ARE OFF FOR EVERYONE, INCLUDING SOCIAL SECURITY. Elections have consequences.
I saw too many people who retired before me get into trouble with their lump sum. During my retirement research almost every financial advisor recommended a pension (which most companies don’t have anymore) over a lump sum. The company I retired from, AT&T, has been doing very well lately. The stock is at a several year high (even last week it was one of the few stocks that were up). I checked before I retired, the pension fund was almost fully funded, and that was when the stock price was at a low. They’ve also been paying down debt. The Pension Benefit Guaranty Corporation (PBGC) is there as a backdrop. My pension is well below legal maximum that they guarantee. Nothing is 100% safe but I sleep a lot sounder with my pension instead of a lump sum.
I also have a pension from AT&T and would point out that this is no longer Ma Bell. I was there as the pension was frozen and the retiree benefit funding gutted. Given the choice between happy retirees and profitability, which do you think they will choose? AT&T will keep funding at minimal levels. BTW-my last job at AT&T was accounting for retiree benefits.
AT&%T stock price is not what you need to worry about. It’s where the fund is invested that matters and the sponsors income.
Like many of the others here, I’m not looking to sell anything to preserve previous gains. That ship has sailed. I could rebalance, I guess. One thing I hear is people “buying the dip.” While intuitively this makes sense, I recall that whatever level we’re at now is where we were back sometime in 2023 or 2024. Did you not have the same chunk of cash then that you do now? If you do, why didn’t you buy at those prices last year or the year before? Why wait until now hoping there’ll be a dip? And if this is new cash you recently came into, were you not already planning to invest it, or is this just accelerating your plan?
Nothing. Same as I did in 2008 when I lost a YUUGE amount. Same as I did in 2020. I have enough cash so I do not have to sell, and I have no losses to offset gains, so I won’t sell. Don’t want the tax consequence. I have no losses because I have held my positions for a long time. Not because I am a great investor, which I am not. Just a buy and holder of diversified ETF’s, with a few of the huge stocks that have done well, such as Netflix, Amazon, Google, Berkshire and Visa.
I am retired and my wife has part time / hobby job which is pretty recession proof. She is 5 yrs younger, and her social security is significantly less than mine, so we started hers. between those 2-income sources and our money market funds and our HYSAs we have plenty to carry us until I file for social security at 70 next March. Even after that we will have enough income to cover comfortable / necessary living expenses and a little more. We won’t have to draw from our equities except for dire emergencies and splurge money.
After talking with our advisor, we moved the most volatile investments to cash equivalents down to a just under a 50/50 split. We also moved some investments from US to emerging markets concentrating on more stable sectors both domestic and foreign. last Monday I sold off even more and moved them to cash equivalents.
We are sticking with our annual traditional trips and most activity and mildly spoiling the grandkids and great grandkids.
A couple of more extravagant trips and purchases we were planning are on temporary hold but ready to pull the trigger should things turn around.
Other than that, we are just settling in for the ride and looking for opportunities to buy back in at bargain prices with our cash equivalent nest egg we have built up when things settle or turn back around.
I’m buying!
Not surprised you found nothing among most readers of Humble Dollar. We are well prepared to weather such financial market uncertainties with a well diversified portfolio across the major asset categories. We are marveling a bit at the number of hair on fire investment experts which seem to emerge like clockwork after such market moves. Thank you to Jonathan Clements and others for shining some light on all this starting decades ago.
I actually did three things, maybe even four.
1) I stayed fully invested, keeping in cash approximately one month of expenses.
2) I rebalanced more frequently. When there is high volatility, one investment is frequently “on sale” compared to another. I sell the relative winners back down to allocation and use the proceeds to raise the losers back up. In fact, I tilt my allocations slightly to the current losers–by about 1% by shorting the current winners by about 1%.
3) I wrote some friends and family that I talk to about investing reminding them that life goes on, etc., copying them an email from Vanguard that said something similar.
4) (Maybe even!) I pondered the possibility that life might become much harder in various ways because of vain ambition and human hubris that both now and in the future characterizes human leaders. I’m praying about this, but I’m not sure how to pray!
You follow your plan. In my case, if the market drops any amount, I do nothing. I have cash reserves for the next few years, so no action is required, as per the plan. “Smile and wave boys smile and wave”
I am glad I found this forum of folks with similar investing philosophies as mine: I am doing nothing in reaction to recent market events.
I met with my financial advisor on Thursday to deposit my maximum IRA contribution for 2024 as well as purchase a new stock for my Investment account. I am age 71 and fortunately I don’t have to be drawing from these accounts. They are part of my retirement buffer, so the ups and downs of the stock market are not devastating to me – if the stock price goes down, the dividend percentage goes up. Regarding the tariffs, they may do more harm than good short term – this is a long term strategy to level the global
playing field.
Every expert out there says tariffs of this kind are a horrible move, short term and long term. This is not the way to level a playing field, alienation our allies.
What we’re actually doing in response to this is thanking our lucky stars that we’re invested in an extremely resilient portfolio that is only down 1.81% YTD (see the Golden Butterfly on this real-time list of lazy portfolio returns: https://portfolioslab.com/lazy-portfolios).
Other than that, not much we can do except to remind our elected representatives that they can stop and reverse this madness at any time. Tariffs are the purview of Congress unless they cede their authority to someone else – which is what has happened
Fantastic post today by Cullen Roche on how we got here. Can’t recommend it highly enough:
https://disciplinefunds.com/2025/04/04/weekend-reading-how-did-we-get-here/
From the link you provided:
”… So the wealth all flows to people who own the stocks and houses … “
Which very likely describes most HD readers.
I would be interested in hearing thoughts about this explanation of what’s going on that was posted on today’s Fox News website:
https://www.foxnews.com/opinion/heres-what-trump-really-up-high-stakes-tariff-gambit
Fox News should remove the stock ticker on bad days and bring it back on good days.
I found the whole foundation of the article moronic.
The article states, “In the meantime, tariffs themselves will generate revenue—an estimated $700 billion or more in the first year.”
That is a 700 billion tax on consumers, and the less affluent gets hit the hardest, while the vast majority of the tax cuts will go to the richest.
Meanwhile Dow Jones Market Data reported that roughly $11.1 trillion has been wiped away from the U.S. stock market since Jan. 17, the Friday before President Donald Trump took the oath of office and began his second term. But yet Trump says
this is short term gain, and going to make America rich again?
How does that math work?
MAGA math
EXACTLY! Trump’s running the world’s economies into the ground with just the kind of math that caused multiple of his realty/businesses to fail, and for him to claim bankruptcy multiple times.
With the market doing so well these past few years since Covid, we were really ‘ahead of the game’ in a good way.
Recognizing that and recognizing the geo political volatility going on (the Ukraine war, the assassination attempts on candidate Trump), I felt we needed to lock in some gains and see where things were headed. We moved about 70% of our 401k’s into some conservative, capital preservation funds back in January. We kept our Roth’s, HSA and IRA’s in the market.
I also moved my son’s 529 into the equivalent capital preservation. It turned out he was appointed to the Naval Academy, so we wouldn’t be drawing heavily from it for college expenses. But, we’re still moving the annual Roth IRA amount for him from that account. At his young age, it all goes into the market. The rest will be there after he graduates. I’m grateful it’s not being impacted.
I wish I could say that I foresaw what’s currently happening, but it was just a feeling. I thought we might be due for a mild recession (the law of gravity , what goes up, must come down at some point).
What motivated me more were the financial goals we hit. When you’ve won the game, stop playing….
From “How To Think About Money” by Jonathan Clements, he writes a story of an old and young stock trader during the 1962 Cuban missile crisis.
Old trader: “They say this could lead to nuclear war.”
Young trader: “Then we should buy bonds, right?”
Old trader: “No, we should buy stocks. If this ends peacefully, stocks are going up. And if we have a nuclear war, it won’t matter what we own.”
Frequently someone says “this time it’s different,” and it is never different. But this time they might be right as the goal is a fundamental shift in world economics.
I am retired and my portfolio has a long-term horizon. The design generates income and attempts to keep pace with inflation. None of the fundamentals, as we understand fundamentals today, have changed. So, my plan is to do nothing at this time, other than continuing to rebalance. But I will watch to see what happens and adjust as I can to the long-term market.
From 60 years of investing, STAY the course. It is time to watch, hang tight, and if you have cash from your stocks, then it is time to buy. This time it is a bit more unsettling because politics is part of the situation, but I am going with history, and the market always has recovered in time.
Continue to my DCA in my IRA, 401(K), & HSA. It does not matter the price today only when I am going to start cashing out in 10++ years.
short answer as to what did: nothing
longer answer: I look at this as well as Bogleheads and a few other forums. I find it a bit disingenuous to assert that it’s never different this time. Regarding economic cycles and unpredictable shocks, fair enough. The issue at hand now are societal/political system shocks, which are certainly affecting the economy, but have potentially far larger implications. (Apologies to mods if I have dipped my toe in to the political- but its part of this story and this moment.)
I’m betting that we will survive. I hope to hell that I’m right. The list of economic calamities that we have survived mostly have in common the fact that they were not brought on by “the political” as you call it. Those were events that politicians and the Federal Reserve had to deal with. Today’s situation is being caused by a politician. That seems to me a fact that people with opposing views should be able to agree.
And now for something totally different: I wonder if the president had a good golf game yesterday.
I think we will survive too. But, for me, this is a new type of worry that supersedes any worry about “Will I have enough?”.
I didn’t panic during the 2000 dot com bubble burst, the 2008 meltdown, and stayed all in the market, near 100% stock index, during the Trump 1 and Biden years. The returns have been fantastic. But Trump 2 felt different. A month ago, I shifted half my portfolio into cash. I just avoided $50k of loss. I just had a sixth sense that Trump would wreck the economy.
Good for you. We’ve had big, sharp downturns before in 2020, 2008, etc. But this time is different because it’s all self inflicted by one man. I’m holding fast because I want to be invested when the inevitable face ripping rally occurs.
Playing “defense” and Dollar Cost Averaging back into the market.
By using the S&P 200 day moving average & NASDAQ 200 day moving average as a guide to rebalance equity/bonds/cash portfolio, more funds available to DCA.
Being ReAligned, The return OF my money is more important than the return ON my money”
What are we doing? Rebalancing and Roth conversions. What are we not doing? Panic selling. I’m cautiously optimistic our plan can weather this storm like it has several others with a 60/40 mix, a very healthy dose of international stocks and 10+ years of guaranteed/low risk income in retirement from SS, small pensions and a 10-year rolling TIPs bond ladder.
Buying!! It’s a fire sale. I’m remembering what Jonathan taught us…hope that brings a smile to his face.
After truly studying what other nations were charging us before this tariff chapter kicked I am calmly letting this administration level the playing field. Between this and what DOGE has uncovered I am appalled and embarrassed at what We The People have let our government get away with. We are former “Lazy Portfolioists” and now are Dividend Harvesters. When the market gyrates I turn off CNBC, open up our brokerage website to the activity page and say to myself “Oh look! Another dividend…” It is a Sleep Well At Night portfolio that took some work to build but now runs on autopilot.
This is worth 13 minutes of your time: https://www.cnbc.com/video/2025/04/04/hayman-capital-kyle-bass-tariffs-will-work-in-long-term.html
We have $$ in dividend stocks (Div King/Aristocrats) too, Rob…and index ETFs. We got some cash built up in the dividend portfolio that I will reinvest.
A 50% equity loss is a possibility Surely millions are quite nervous seeing 6 TRILLION dollars of wealth gone. If you are working you should no nothing. Pre retirees and retirees heavily in equities might be in big trouble if they don’t have a bucket of safe assets. Learn the BUCKET STRATEGY and SORR
Yesterday I “lost” $101,000. The YTD day total is near $250,000. Doing nothing except agonize over the unnecessary stupidity of all this. The good news is I bought my German, Stuttgart made car last month.
I feel sorry for all the Americans who work selling and repairing foreign cars and for the 50% of Americans who prefer to buy a foreign car.
If fact, I feel sorry for all Americans, the other side of this mountain may be a desert.
It will all be good…after trumps 3rd term LOL
Yesterday Morningstar’s US Index dropped 5.91%,
Our portfolio of 30% domestic equities, 15% international equities, 45% bond, 10% cash down 2.66%, thank you diversification.
I am somewhat concerned however about the government defaulting on their bond commitments due to those in power in Washington.
Wouldn’t you say that default would jeopardize the dollar’s status as reserve currency and that no group in DC would think of it as an appealing strategy? If yes, you can’t truly believe that default is more than some minuscule level of likelihood (some cascading Black Swan event)
“Wouldn’t you say that default would jeopardize the dollar’s status as reserve currency and that no group in DC would think of it as an appealing strategy?”
Well most economists would never think that the government would do what it’s doing now, and what is the response from Republicans in congress? CRICKETS!
So yes, I truly believe that default is more than some minuscule level of likelihood, as when the Republicans were last in power they nearly did default, and many Republican congressmen were calling for it to happen.
I have similar concerns about defaulting on bond commitments or manipulation of COLAs on TIPS or repression of interest rates on treasuries if not outright defaulting.
We have a “Growth with Income“ portfolio per Fidelity with enough cash and TIPS to last to age 95+ if no government manipulation of COLA or repression of rates or interest payments. (That is a concern although see no good alternative.). After polls in September indicated a change in presidential leadership I added a 5% position in a gold ETF. I will consider moving that position into the market if a 20% drop in the market depending on global stability.
We are still in the workforce and contributing to a Vanguard ETF in our discount brokerage account every two weeks. On Thursday I increased our bi-weekly purchase by 50% and when I saw Friday’s drop, I invested two additional contributions ahead of schedule.
In my work role as president of my local community bank, my CFO and I took advantage of lower interest rates to fund some of our pending commercial loans ahead of schedule and we lowered one promotional CD rate of ours.
I have been dollar cost averaging my wife’s Roth conversions. Yesterday I moved three months of conversions forward as the money was in a fund, not an ETF, and thus I converted more shares due to the end of day closing price. This means I still leaves 5 months worth of conversions if the market continues to drop.
I captured the bit of tax loss harvesting I could yesterday. Besides that, staying the course as it looks most of you are. Best of luck to all of us.
What am I doing? The same as the Covid crisis, 9/11, dot com bust, 20% inflation during Cater’s time, S&L crisis and the energy crisis. Not a whole lot except ignoring all the pundits regarding finances. Not even remotely making light of any of this, but this too will pass.
Nothing seems to be the word of the day despite the loss of $6 trillion of market value in the markets. I basically did nothing as well but I’m as scared as I’ve been in a long time.
As I just posted elsewhere here, we aren’t doing anything with our investments. Earlier this year I did rebalance our portfolio to a more conservative AA of stocks/bonds (50/50j. Some may view this as market timing, but I felt the more conservative approach would help me sleep better at night after having really“won the game” with the market returns of the past few years. Our bonds are mostly Treasuries held in a T-IRA which we should be able to live off of indefinitely if not forever. We shouldn’t have to sell stocks for an indefinite period of time, so am somewhat indifferent to the price swings the market is going through. Am somewhat concerned however about a recession and possible future inflation for my family though.
Like you, I had also been thinking recently of shifting our asset allocation to be more conservative. Unlike you, I didn’t get around to it before the latest events 🙂
That’s fine; still generally happy with our asset allocation, just probably won’t be buying this dip.
Staying the course
What I’ve planned and put in place over the last forty years isn’t going to change… Until our kids inherit it 🤗
Continuing to mostly stand pat, although I have added some to my positions in Swedish, Australian, and Polish companies, along with an Emerging Market ETF. This was all planned and ongoing but we have a strong cash/bond position so basically we are just following Charlie Munger’s advice and seating on my arse and doing nothing or at least very little, other than watching the Cardinals on the bird feeders. Just remember, this to shall pass.
Nothing. “By failing to prepare, you are preparing to fail.”
What to do? For the most part, nothing. That is, continue as before. However, if I had short-term debt I’d probably think about reducing it, for no other reason than peace of mind.
Some say “this time is different”. I suggest avoiding most investing forums as there will probably be significant negativity. As this stretches out, there will be more. I’ve experienced recessions going back to 1959 (those early ones really did a number on my parents. My father’s employer laid off the entire backoffice staff during a serious recession and jobs were very difficult to find. After a year of unemployment he jumped from job to job for about 10 years).
I like to think “anticipate the best and prepare for the worst” so my portfolio was positioned where I wanted it before this current downturn. I won’t need to sell equities. We’re retired and do take an annual withdrawal, but we don’t spend all of it. We are debt free and are holding some excess cash which could be deployed. However, I keep in mind that one can buy on the way down or the way up. The results will generally be the same. I’m really in no hurry.
My portfolio was showing some losses before this, almost all in my bond funds. I expect there will be more “red” in the coming weeks and months.
We anticipate no changes to any of our plans, but are always prepared to make lifestyle changes.
Reading all of the responses below, I have learned that my paralyzed, deer-in-the-headlights inaction in the face of this man-made market disaster is exactly what I should be doing.
Thanks, folks, for the reassurance!
I am doing the same thing in did in 1987, 1994, 2000, 2008, 2020, and 2022…absolutely nothing! Volatility is the price paid for positive returns over time.
Why do nothing? Because 100% of my retirement income is guaranteed and 0% of it comes from my portfolio. (Social Security & annuity income.). In addition, we have @18 months in cash, should we need it.
With no mortgage and zero debt, and income twice the amount of our retirement expenses, we are positioned to “ride it out.” Am I happy about the paper losses so far? Of course not, but the experiences of the aforementioned market “corrections” have demonstrated the fact that, “THIS TOO, SHALL PASS.”
All the fear mongering by the media aside, I believe the economy is going to recover and in fact flourish, because of the economic policies of the Trump Administration.
As one of my all time favorite quotes says, “Time will either promote you or expose you.” I believe President Trump, and our economy, will be “promoted.”
Good question. We are retired since 2010. I try to have a 50/50 AA and finished 2024 with 57/43 which I needed to rebalance. I did not get around to it until Trump’s tariffs started spooking the market. I waited until the market rallied to less than 3% loss for the year and sold 5% of equity.
We live off SS and my pension so there is nothing we can do at the moment. The cow has already left the barn, so we will wait it out.
I think selective tariffs, like China and others who exploit the US, are good, but am concerned at how broadly he is doing this. Surely not all of the countries are exploiting the US. We still need some allies.
People who are working and not yet retired need do nothing. They will be continuing to average into the stock market each payday albeit they will acquire more shares due to lower share prices.
The retired who have a reasonable allocation to bonds and other more liquid assets need do nothing either. They have planned their affairs so that when the market declines, they need not sell equities to fund their retirement.
Having lived through much larger market declines over the near 25years of my retirement, I know that this too shall pass……
Wait the storm out. Conserve cash and capital. Delay spending. Reduce expenses. Take no risks. All good strategies for individuals and businesses. Not so good for the economy.
A while back I posted that, in an effort to consolidate our finances we were moving our accounts to Fidelity. In order to initiate a transfer to Fidelity, we moved about 40% of our investments to cash this past Monday, 4/1. I will slowly redeploy the money into the market as soon as it becomes available to trade.
While my action on Monday was partially inspired by the looming tariffs, I never would have taken that action purely to time the market. I’ll just attribute the move to dumb luck.
I know people that got caught the other way (over the years not right now).
You have a good attitude that’s going to serve you well.
Thank you Scott. I feel bad for the folks in the spend down part of their lives. At ages 73 and 70 we are technically in the spend down generation, but by virtue of living in a low COLA city and having no debt, we are, so far, impervious to this insanity.
Now I’m not the sharpest tool in the shed but my uneducated guess is to buy back into the market over the next 9 months in order to be back in by 2026. I have no idea if the carnage will end by then, but I don’t want to miss an eventual market recovery.
Another for doing nothing. I’m already retired and with my long-time asset allocation a stock market downturn has been planed for.
“I searched and searched the forum for a post about what HD readers are doing in response to the effect of the uncertainty of tariffs on the stock market but I found nothing.”
For the most part Nick you found exactly what I’m going to do…. nothing.
Now saying that I will keep a daily (until the dust settles) eye on my allocation and if my stock allocation drifts by more than 5% will rebalance.
A while ago Morningstar’s researchers found that a 20-40% equity allocation would perform nearly as well as a significantly higher allocation. At that time I decreased my equity allocation by 5% to 45%. If the market is in correction territory at the time of rebalancing I may increase the equity portion by another 5% (to a total of 10%) back to my original target of 50%. If the market drops to bear territory I may increase the allocation to 55% and leave it there until the market reaches a new all time high.
My general investing philosophy is to never make changes to my portfolio by more than 5% at a time.
We are staying the course. We had changed our asset allocation to a little more conservative last fall. So will just rebalance. I loved Newsboys comment about tuna earlier. We keep a stock of pantry items also so we don’t have to pay full price. We have a small “playing” account so we can learn about the stock market and might take some extra to buy if there is anything that interests us, but I am not talking about a large sum. Chris
Also wanted to say I was glad to see the responses here so any young person reading HD can be reassured to stay the course also. Chris.
I’m doing nothing different, but I tell myself that my 401(k) and HSA contributions are now buying stocks on sale.
As for the current situation, this too shall pass.
I’m doing nothing different, but I tell myself that my 401(k) and HSA contributions are now buying stocks on sale.
As for the current situation, this too shall pass.
How long will the passing take and what is on the other side?
More tariffs?
Nothing, except seek some buying opportunities, but likely nothing. I am still working and maxing out the 401k.
What will I do?
I may go to Costco this morning to stock up on nonperishable items we use frequently. I wouldn’t mind a year’s supply of coffee and tea, and may look for other nonperishable bulk purchases.If domestic stock indexes hit a 20% decline, I’m increasing my allocation to stocks (via international index VXUS and US value and small cap indexes) by 10%. If stock indexes decline by 30%, I’m increasing by 20%. And if they go down 40%, I’m prepared to “back up the truck” as I did in varying degrees in the previous downturns of 1987, 2000, 2009, and March of 2020, and increase my stock allocation by 30%.(Warning: This will be considered political by many.) Continue wondering what it is in Trump’s psyche that drives him to to impose tariffs of this nature, when almost all living economists agree this is bad economic policy, and what the real limits are to his apparent mindset, propensity, or driven need to bully or dominate those around him, countries included.
Nothing. I have cash, bonds, international and domestic stocks. I hope enough cash and bonds will get me through this manufactured #@#storm. I hope the next election can restore order to our world. If not, I will be living in social security, if that isn’t destroyed too.
Two alternating thoughts.
Regarding our existing market holdings, I once again will channel my inner Bogle: “Don’t just do something, stand there”. The cause of this particular market upheaval may be unique, but the inevitable outcome for plan-oriented, long-term investors is not. Faith, patience and discipline.
As it relates to current (excess) cash holdings, I always liked this analogy: Tuna is now on sale at the local market / we enjoy tuna / tuna has an extremely long shelf life / time to fill up our cart with tuna.
“The cause of this particular market upheaval may be unique, but the inevitable outcome for plan-oriented, long-term investors is not.”
But if we lose democracy, become an oligarchy, or dictatorship/authoritarian ruled country then, “this time WILL de different.”
Indeed, David – we are living in interesting times. This was addressed in one of the three principles mentioned above for successful long-term investing (faith, patience, and discipline).
Faith is first on the list for a reason….Faith in the efficiency of free markets, faith in the nobility of free minds and faith in the steely determination of a free society to take the required corrective actions when confronted with the threat of tyranny.
I am genetically hard-wired as an optimist in this regard…My 5th great grandfather was a signer of the ultimate document of faith – the Declaration of Independence.
“Hope is not a strategy,” I’ve heard it said many times in my life.
Newsboy, love the tuna analogy. Chris
Like others here…nothing. Thankfully our “soon bucket” has sufficient cash at reasonable interest to carry us for supplemental spending needs for quite awhile. Just glad we planned our retirement assets with our FA several years ago for just such market gyrations. Yes it was fun watching the values go up the past 3 years but we didn’t think that would go on forever and we stayed the course as we plan to do now.
😴
I don’t need money from any of my investment accounts for at least 10-15 years. Why bother with what is happening in the next 4 years? I have gone through the dot-com bubble, the great recession, a pandemic, and yet I am still alive and well physically and financially. Stay the course and diversified, see you on the other side.
What is unprecedented is the scale of money printing that goosed up the asset markets since 2009. Now slowly regressing to the mean.
Or did you think that markets simply go up forever?
Now that’s a cute idea! Slowly 😂
Nothing at all. We have an asset allocation that we can live with through good and bad. The market goes in cycles and reacts to current events.
Like Michael, nothing. Vanguard just sent me an email saying “stay the course”. If I get around to looking at my portfolio in a few days, and my stock allocation has gone from 50% to below 45% I’ll have to consider buying. If I look.
Same here.
Doing what you found. Nothing.
Think our asset allocation is okay where it is.