Tariffs and Market Volatility

Stock price diving

The stock market does not like surprises.

Part of the current market volatility is due to the threat of higher-than-expected tariffs on nearly every country around the world. But there is also the concern that these tariffs will increase consumer prices to a level that seriously damages consumer spending, the driving force of the U.S. economy. Higher import prices can also hurt U.S. companies that depend on imported materials and parts, while retaliation tariffs could hurt U.S. companies that export goods and/or do business outside of the U.S.

Investing for the long term

Although it is impossible to predict the market, you can probably expect more volatility. Account values dropping daily is always worrisome for investors but it's important to remember that markets move in cycles. Regardless of the reasons for declining prices, the market always bounces back. Remember:

• The losses you see in your investment account are not really losses until you sell. Panic selling is the wrong thing to do. Historically, some of the best days of stock market performance have followed some of the worst days. No one can predict market directions, and letting emotions convince you that you should sell can lead to missed opportunities on the way back up. More importantly, it should cause you to reevaluate whether or not investing in stocks is right for you.

• A down market can offer buying opportunities, but since you don’t know when exactly prices have stopped dropping and will begin to rise, buying decisions should be made rationally with a long-term investment strategy in mind.

• BUY LOW

  
  

Past performance is not a guarantee of future results, but it often pays to be patient and stick to your long-term strategy. This is true during any period of market declines, but the current situation is still so new and subject to change, it’s probably not wise to place too much emphasis on initial market reactions. The U.S. stock market has proven time and time again that it is resilient and adaptable to changing economic conditions.

To learn more about making the most of this roller coaster ride that the stock market currently resembles, contact MNM Vested, LLC

All investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful. Past performance is no guarantee of future results. Actual results will vary.