Massive tariffs from President Donald Trump worldwide followed the announcement of “Liberation Day” last week. The stock market responded, and it responded severely. The following Thursday and Friday saw losses of trillions of dollars, as sellers liquidated their assets to major companies in the S&P, DJI, and NASDAQ. Headlines of economic depression followed, terrifying millions of Americans. However, this week, we’ve seen a major comeback in the stock market, as we can cancel fears of a stock market crash.
But how should we react to this current environment when it comes to the current stock market conditions? Let’s review five things you should do today.
1. Don’t Panic
Headlines told us that the end of days was near, and the tariffs would cause the next great depression. While tariffs have a specific economic purpose to tax imports, all hope is not lost. Panicking will not help your future, nor will it help your retirement accounts. Instead of panicking, focus on making the right decisions financially, building a strong budget, and spending within your means.
2. Invest Now (If You Can)!
If you can afford to do it, grab your spot in the stock market! Trillions of dollars were liquidated from major companies last week. This brought the stock prices to a 1-year low, allowing a strong opportunity for average investors. If you can afford to do so, this is a great opportunity for you to throw some extra money into your IRA, or even up your 401(k). The stock prices have already started to increase, so act quickly. However, if you cannot afford extra room in your budget, that’s okay! The stock market will always be there. The prices go up every year, so even if you have to wait a little, you will always be investing at the right time.
3. Don’t Panic Sell
While the stock traders on Wall Street liquid trillions of dollars in portfolios, this is not the right time to panic sell. Prices are lower than they were a couple of months ago, so you’d be selling at a loss. It’s important to remember that the stock market always moves up (in the long run), so holding is always the best option. Unless you are in retirement and rely on your investments, then there’s no reason to sell at a loss.
4. Evaluate Your Budget, Debt, Income, and Career.
It’s always a good time to look at your budget, but right now is a good excuse to make this an urgent issue. You can use our starter budget if you don’t already have your budget set for you and your family. We have resources for debt as well, so if you need help, we’re here for you! When times of economic uncertainty hit us, we must try to stabilize our income, our debt, and our careers. So if you’re considering making a career change, it might be a good opportunity to pause and evaluate your situation (especially if you are quitting a job without a stable alternative).
5. Take a Break From the Dread Headlines
Even just a few days ago, the headlines of major news organizations would make us feel like all is lost. Fortunately, as we’ve seen from the stock market this week, that was not true. It’s important to understand that while the stock market is important for most of our investments for retirement, it is not the only factor in the health of the economy. Inflation looks to be stabilizing, job numbers look to be steady, and our GDP in the U.S. is strong. So take some time for your mental health and step away from the dread-filled headlines.
Watch our companion video here!
