by Craig Erwin, Ph.D.
Photo by Mart Production on Pexels.com
With his tariffs, President Trump just unleashed all kinds of economic terror, not just on people and businesses in the US, but on those in nearly every corner of the world. Then what? He headed south to spend the weekend golfing at his country club rather than be confronted by the protests in Washington and other cities, due to his and Elon Musk’s actions and their devastating effects on families, their jobs, and their lives. Although he says “tariff” is the most beautiful word in the English language, Trump must have flunked his economics course. A tariff is a tax which makes things we all buy more expensive, promising much steeper inflation and hardships as millions of Americans struggle to make ends meet. You can gauge how devastating Trump’s tariffs will be by the stock market’s reaction. The two-day freefall ranks among the sharpest declines in history, according to CNBC.
What should you do in reaction to Trump’s tariff announcements and the global stock market selloffs? Sit on your hands and try to avoid the news. Unless you are an experienced investor with nerves of steel, almost anything you do might hurt you. If you sell to stop the pain and preserve what’s left of your retirement savings, you will lock in losses. It may seem hard to believe that the stock market will rebound, but it trends upwards in the long run, in spite of tumultuous periods like this one. Someday, today’s violent market swings will look like a tiny blip as stock markets continue to churn higher in the long run. If you can’t resist doing something, don’t sell, buy more. Stocks are on sale, so if you buy more, someday you’ll be happy you did.
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