Jim Paulsen, a former chief investment strategist at the Leuthold Group, discusses how long it will take for the stock market to stabilize after President Donald Trump’s “make money” tariffs.
Investors are riding roller coasters and not the fun kind with the US stock market under extreme volatility amid massive sales President Trump stands firmly in exercising his broad tariffs Strategies for most of our trading partners.
Bear Market and the Territories of Modification
The S&P 500 temporarily hit the Bear Market on Monday, following the Nasdaq Composite, which fell from its latest high on Friday into the territory of Bear Market or fell 20%. The Dow Jones Industrial Average is shy in itself as of the end of Monday.
This measures volatility index, or VIX for short, in CBOE, and is spiked to the highest level in five years and hovering at 46 levels.
Don’t panic
Selling for sale while preventing many main street investors from watching their portfolio, 401(k) or retirement accounts is not a big no for long-term investors.
“You don’t sell in panic, you never sell in panic.” Ken Fisher, founder of Fisher Investment Varney & Co. Oversees $295 billion in assets in an interview with
Panic sales cost
According to a Fidelity analysis shared with Fox Business, those engaged in panic sales will be lost when the market recovers.
For example, $10,000 was invested in the S&P 500 from January 1, 1988 to December 31, 2023, and missed out on a profit of over $264,000 by missing out on the best five-day investment.
Missing the best day can be expensive (Faithful Investment)
Additionally, the company points out the hypothetical decision made during the 2007-2012 global financial crisis with a portfolio of 70% equity/30% bond mix and account balance of $400,000 and workplace donation plans $15,000, so it points out that “historically, all serious slumps have ultimately made way for further growth.”
“It took 52 months for investments to return to highs set before the global financial crisis,” Fidelity wrote. Those who stayed on the course had an increase in their account balances by about $500,000. Those who moved to cash and stopped contributing have their balances dropped to around $350,000.
Investors who stood out after the global financial crisis first recovered (Faithness)
“We estimate that the annual target price has fallen, revenue estimates are falling, and that it is in the full range. I think it’s a good thing to buy this kind of terrifying era.
Are you playing?
However, the promotion of tariffs is in the early days, and it is unclear when and how the dust will settle. Companies including Goldman Sachs and JPMorgan dial the possibility of a US recession JPMorgan CEO Jamie Dimon gives warning on monday.
Fed Chari Powell says tariffs are likely to cause inflation and that could last
“In the short term, we may see inflation results not only at imports but at domestic prices. Also, rising input costs and increasing demand for domestic products. How this is regenerated with different products depends in part on the substitution and price elasticity.
Last week, Federal Reserve Chairman Jerome Powell repeated similar sentiments.
