As President Donald Trump introduces comprehensive tariffs on goods coming into the United States, there’s a growing sense of unease among Americans about their financial futures. The general concern is that these tariffs might reignite inflation fears, while investors are worried that increased costs could lead to decreased profits and further strain the already struggling stock market.
By Thursday morning, the futures linked to the Dow Jones Industrial Average had plummeted by 1,200 points, which translates to a 2.8% drop. The S&P 500 futures declined by 3.4%, and Nasdaq-100 futures saw a 4% loss.
Jean Chatzky, the CEO of HerMoney.com and host of the HerMoney podcast, mentioned that such sharp declines or sudden market surges are not unusual. “In these volatile times, trying to time the market is generally not advisable,” she emphasized. “It’s about the time in the market, not timing it.”
The personal finance sector offers more insights: Tariffs are detrimental to U.S. jobs and industries, market uncertainty causes turbulence, and Americans are experiencing ‘sticker shock’—but adjustments can be made.
Recent studies highlight that trade tensions, inflation worries, and potential recession fears are chipping away at consumer confidence. Chatzky noted that it’s quite typical for Americans to feel anxious during such volatile periods. “There’s little dispute that consumers are understandably jittery, perhaps more so than we’ve seen in a while,” she observed.
To regain some financial stability, Chatzky advises setting aside funds in a high-yield savings account. This could mean cutting back on dining out or limiting rideshare expenses. Currently, top online savings accounts offer an average rate of 4.4%, significantly higher than the average 0.41% at major retail banks. “Taking proactive steps is key to feeling more resilient,” she added.
Although it may be tempting to shy away from investing right now, Chatzky pointed out that a downturn offers a prime opportunity for dollar-cost averaging, which helps mitigate market fluctuations. It’s also important to review your portfolio to ensure it’s still aligned with your risk tolerance and make necessary adjustments.
The bottom line on market timing? It’s a risky gamble. Chatzky, along with other financial experts, advises against sudden financial decisions based on market timing. Predicting market highs and lows is virtually impossible. A Wells Fargo analysis from last year revealed that the top 10 trading days for the S&P 500 in percentage gains over the past 30 years all happened during recessions and often near their worst days. Despite market ups and downs, the S&P 500 boasts an average annualized return of over 10% over the long haul.
