Market Mayhem Persists As Tariffs Spark Turmoil — Experts Say 'Don't Panic'

The stock market has seen a historic two-day drop, but experts are cautioning against panic.

What Happened: The crash has erased over $5 trillion in market cap, marking the most devastating week for the market since the early onset of the COVID-19 pandemic in 2020.

The Dow Jones Industrial Average took a dive of over 2,200 points, the Nasdaq 100 entered a bear market, and the S&P 500 lost nearly 6%. The crash spared no sector of the S&P 500.

Investors are now left wondering about the next course of action. While the urge to panic and make drastic decisions can be overwhelming, experts recommend against it. They remind investors that the overall trend of stocks is upwards, and that severe market drops are often followed by recoveries.

Gina Bolvin, president of Bolvin Wealth Management Group, urges investors to acquaint themselves with cyclical and defensive stocks, and to ensure their portfolios are diversified. She also warns against day trading, asserting that most day traders end up incurring losses.

“Don’t panic. The headlines and the market change quickly,” she told Insider.

Also Read: China Restricts Rare Earth Exports To US As Part Of Tariff Retaliation: ‘Geopolitical Earthquake In Slow Motion,’ CEO Says

“The only change to your portfolio should be to confirm it’s diversified and you can weather the storm in good times or bad,” Bolvin added.

Investors are also advised to maintain some of their investments in cash or cash equivalents, like a money market fund. Brett Panziera, CFP, an associate director of financial planning at EP Wealth Advisors, recommends having sufficient cash on hand to cover at least six months of expenses, or up to two or three years if retired.

“Even outside of a recession, you should aim to have an amount of cash on hand to fund at least six months of your expenses, or if you are retired and don’t have employment income to support your spending, perhaps up to two or three years,” Panziera said.

Why It Matters: The recent market crash, triggered by the ongoing trade war, has left investors in a state of uncertainty. The advice from experts to stay calm, diversify portfolios, and hold some investments in cash or cash equivalents could prove crucial in navigating this turbulent period.

The general upward trend of stocks and the common occurrence of rebounds following deep market plunges offer a glimmer of hope amidst the chaos.

However, the situation remains fluid, and investors are advised to stay informed and make decisions based on their individual financial situations and risk tolerance.

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