Here’s how investors should react during times of uncertainty.
Transcript:
ART HOGAN: Some of the major factors in the recent sell off we’ve seen in the market really sit around uncertainty around trade policy. So by that, I mean after the election, we saw a certain amount of enthusiasm and exuberance about the new administration coming in with the idea that they would be pro-growth, pro-business and good for the market. And all of that has dissipated over the course of the last three weeks, and certainly over the last week or so. That’s because the the bad part of the new administration, the things like tariffs and immigration and certainly cutting the federal spending and firing federal employees have come first. The sequencing doesn’t have an offset. There’s no positive attributes that we can say, well, you know, we’ve got higher prices with tariffs, but we’ll have a lighter regulatory touch. Or perhaps corporate taxes will remain the same for the next five years. So investors also feel like they changed the goalposts or the or the what. Trade policy is going to do for us almost on a daily basis. So that uncertainty really affects how investors think about the markets they’re pulling back. It affects how people that run companies actually do their planning for the year. And it certainly affects, in a real sense what, you know, what the economy might do. The longer we remain uncertain, the further we push out decisions, the more the economy may well slow. And I think that’s what the market’s worried about in the here and now.
My advice to investors in uncertain times like this is, first and foremost, try to separate the news from the noise we hear a lot. And unfortunately with social media, we hear a lot 24 hours a day. And not everything you hear is necessarily going to be the end result, right? So don’t assume some worst case scenarios are going to happen. So there’s been a lot of things that have been thrown around about stagflation, which we haven’t seen since the 70s. And that’s likely not going to be the the economic outlook for us this year. We may slow down, but I don’t think we’re going to go into a recession. But you don’t want to make changes to your long term diversified portfolio because of what’s going on in the current politics, because it’s almost impossible for you to get out and wait till the dust settles, because that’s never settles. We’re always uncertain about something. So sticking to your game plan, making sure you’re diversified, and always remember there’s more noise than there is news out there and not everything’s a signal.
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