April 10, 2025 • 19 mins
It’s been a bewildering time for retail investors trying to make sense of global markets. In the week since President Trump unveiled sweeping tariffs, markets have plunged, rebounded — and now, they’re sliding again. Meanwhile, the trade war between the US and China continues. Both announced severe new tariffs this week.
On today’s Big Take podcast, Bloomberg’s Charlie Wells and host Sarah Holder try to make sense of what all this uncertainty means for your money and dig into what experts recommend doing to protect yourself right now and in the weeks and months ahead.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
It's been a bewildering week for retail investors trying to
make sense of global markets. After US President Donald Trump
unveiled sweeping new tariffs, we saw ten trillion dollars in
stock market value disappear. The US president is doubling down
on an economic policy that most economists think is de
anchored from reality. Then came Wednesday's stunning rebound, remarkable rally
(00:34):
we're seeing in the markets right now, up nearly ten
percentage points on the Nasdaq, and today markets have slid again.
Yesterday's terraf for Pree did not last long, with Ustok's
lab resuming their declined bonds not getting much love, the
dollar sliding, and corporate credit default risks rising. Meanwhile, the
US and China, the world's two largest economies, have continued
(00:54):
to ramp up the pressure on each other with a
series of compounding tariffs. President Trump's tariff on Chinese imports
have reached one hundred and forty five percent, factoring in
a twenty percent levee placed on China over its role
in fentanyl trafficking, and China has said it's raising tariffs
on US imports to eighty four percent. Bloomberg's Charlie Wells says,
(01:17):
all of this creates a lot of uncertainty for businesses,
which translates into uncertainty for investors of all kinds.
Speaker 1 (01:25):
We actually had a Bloomberg report about Walmart telling a
company just a few days ago in China not to
put sticker prices on Christmas ornaments because there's just so
much uncertainty about how much things are going to cost
come Christmas. So, you know, beyond ninety days, beyond this
pause that Trump has put into place, there's still going
(01:46):
to be a lot of uncertainty and that's probably going
to play out in the stock market too.
Speaker 2 (01:49):
As a personal finance reporter, Charlie hears from a lot
of people looking for guidance from experts on what financial
moves they should be making. And he says, these past
few weeks, everyone's been wondering the same thing.
Speaker 1 (02:02):
So the big question that I get is really simple,
but it's a really hard one to answer, and it's
what should I do with my money? Right now?
Speaker 2 (02:13):
I'm Sarah Holder, and this is the big take from
Bloomberg News today on the show. In the midst of
all this uncertainty. We're going to take a look at
your money. We'll here expert advice on what to do
with it right now and in the weeks and months ahead.
Wild swings in the stock market are anxiety inducing for
(02:36):
all kinds of investors. So if you're nervous, you're not alone.
Charlie says he's heard from a lot of readers this week,
including someone who did the one thing financial experts really
don't want their clients to do.
Speaker 1 (02:49):
She said that she was so relieved that she sold
out of her stock portfolio. And this was someone in
her thirties. This is someone who has a long time horizon,
who you know, any expert would say has a really
high risk tolerance. Instead of kind of staying in the
market as most financial advisors would recommend, she sold out
and is sitting in cash. And that's kind of not
(03:09):
the sort of thing that you're supposed to do, But
it represents the level of fear that there is in
the market right now. It represents the fact that people
are really trying to navigate the uncertainty right now, and
a lot of people think that that's just being in cash,
but that's not a great idea, and we just have
so much data on that. When you sell, you lock
in the loss, but when you stay in the market,
(03:33):
it's just a paper loss that very likely is going
to recover.
Speaker 2 (03:37):
What about if you have less risk tolerance, if you're older, say,
if you're nearing retirement.
Speaker 1 (03:42):
This is one of the issues that has been really
difficult lately. People who need to sell because they are
going to leave the workforce because they are retiring. And
a lot of people had asked, you know, how much
stock should I have? Is this market going to keep
going up and up? And a lot of you know,
people who were nearing retirement I think, were maybe a
(04:04):
little bit overly optimistic about the trajectory of the stock
market because one of the things that we know is
that you know, it does recover after downturns, but it
also turns down, and so just getting caught up in
some of this timing I think has been difficult for
a lot of retirees. And there's been this temptation over
(04:25):
the past two three years, as we've seen this huge
stock rally to maybe over allocate to stocks because it
seems like the good times are going to keep on rolling.
As we learned over the past week they're not.
Speaker 2 (04:40):
Well. One of the things that investors have been paying
particular attention to, something we covered on The Big Take yesterday,
where the swings in the bond market. Earlier this week
we saw the selloff in US treasuries which sent yield surging.
Can you explain why that's such a big deal.
Speaker 1 (04:55):
It's a big deal because it was really unusual. And
so usually what happens is is when there's a lot
of fear in the stock market, investors want to go
someplace safe. They want to go someplace where they know that,
you know, they've got the full faith and credit of
something that's really responsible, and usually that is the US
(05:16):
government bond market. Those are US treasuries that people tend
to turn to, and so when stock prices go down,
people usually want US treasuries, these bonds, and so those
bond prices go up and then the yields go down.
But this past week, something really weird happened, and it
was that as stocks went down, prices went down, which
(05:38):
meant that bond yields went up. And this is just
not something that we're used to seeing in financial markets.
Speaker 2 (05:45):
Well, if US treasuries are looking less safe, what does
that mean for the typical sixty forty split many of
us think of as classic investing advice for portfolios.
Speaker 1 (05:56):
Yeah, so I think that, you know, the sixty forty
is a very you know, time tested strategy. It's been
under pressure over the past few years of kind of
getting the right mix between stocks and bonds, getting risk
from stocks with the safety of bonds. And I think
if there is this belief that US treasuries are not
as secure, you know, as we've known them to be
(06:18):
for so many decades, that maybe that strategy isn't a
smart one. But I think it's too soon to call
for the end of the sixty to forty portfolio. I
think that one point that financial advisors always make to
me is just because you're seeing one day this highly
unusual event in markets, that could look like evidence that
(06:40):
people no longer have full faith and confidence in the
in the United States, that there is concern about the
credit worthiness of the United States. You might feel that
one day, but then the next things start to recover
and we move on, and so making a kind of
drastic change changing some of these fundamental assumptions that we
have can be really dangerous.
Speaker 2 (06:58):
I want to make sure people understand that the significance
of higher yields in the bond market, how might that
show up in people's everyday lives.
Speaker 1 (07:06):
Yeah, so you know, the everyday person isn't necessarily sitting
around thinking about the yield on the tenure treasury. But
ten year treasuries are really important because they're benchmarks for
a lot of the consumer products, the kind of consumer
borrowing that we see in the everyday economy. So the
ten year treasuries used as a benchmark for thirty year mortgages,
(07:28):
It influences student loan borrowing rates, credit card rates, and
so it really does trickle down into the everyday economy.
So if you're seeing that yield go up really high,
that means basically that you know, mortgage prices will eventually
be higher, that the amount that it costs to borrow
will be higher because that benchmark that so many lenders
(07:51):
use has gone up.
Speaker 2 (07:53):
So, Charlie, people are coming to you asking what should
I do with my money right now? Bloomberg recently published
a piece about investing in time of market uncertainty, and
one thing that the experts who spoke to Bloomberg encourage
everyday investors to do was evaluate their portfolios. What does
that actually look like in practice, and what do experts
say people should do right now?
Speaker 1 (08:13):
Advisors usually say, you know, before you make any moves
at all, before you try to take advantage of moves
in the market, Before you know, you try to buy
the dip. As we hear a lot of people talking about,
you just want to make sure that you're in a
really safe, comfortable financial position where if the uncertainty in
the stock market translated into say the job market, and
(08:35):
you were to lose your job, you would be okay
for the length of time that it might take for
you to find another job. And so really step one
whenever we're in a time of uncertainty is to make
sure you've got an emergency fund that you know. That
number on the emergency fund varies from as little as
three months to a year, but advisors really say, you
want to have three months to a year's worth of
(08:58):
salary socked away just so you can absorb any shocks.
So that's kind of step one. And even if you've
got that, even if you've you know, you feel like
your savings are pretty good. Something that you can do
in a moment like now is just to kind of
take stock just just to check in. I think a
lot of times we've got you know, some savings in
one bank account, we've got you know, eye bonds somewhere else,
(09:19):
we put you know, the four oh one k in another,
and just kind of getting it all organized. Really is
step one.
Speaker 2 (09:25):
One of the first steps for people right now might
be to take stock of where they're at. But something
we keep hearing is don't look at your four to
oh one k. Is there a point at which that changes?
Is there a point where financial advisors say people should
jump in, should look closer at their four oh one
ks in a time of market uncertainty.
Speaker 1 (09:44):
Yeah, So advisors don't like people to look at their
long term investments because you know, historically, we know that
stock markets recover that anyone who does look at their
four oh one k now is probably going to see
a really disappointing dip. But that doesn't mean that you
can't do nothing. And I think one of the points
(10:04):
that I've heard from experts over the past few weeks is,
you know, now could be a good time to kind
of reassess your investment strategy and dollar cost average. If
you do want to make some kind of change. And
so what that means is, instead of say, you know,
dumping a bunch of cash into the market right now,
(10:26):
you might take a certain amount and put it in
over a fixed amount of time. So say, instead of
putting you know, ten thousand dollars into the stock market
right now because you think prices are really good, you
might put two thousand into the market for the next
five months. And what that does is it helps you
get access and exposure to the stock market, but without
(10:49):
necessarily risking the fact that stocks could keep going down
from here right. I think that's one of the main concerns,
and that's one of the reasons why advisors don't like people,
you know, looking at these long term investments too much,
because it could make them feel like, oh, my goodness,
you know, Apple's down, Tesla's down, everything's down. I'll get
(11:09):
a great discount. Dollar cost averaging allows you to kind of, yes,
clock some of what seems like a discount now, then
also hedge the fact that these stocks could be discounted
even more in the future.
Speaker 2 (11:22):
So it's not just don't look at your four owe
k because it might make you super anxious. It's don't
look at your four o one k because you don't
want to make rash decisions.
Speaker 1 (11:30):
That's right, But also you can make decisions and you
can look to see, like, you know what, maybe I'm
not as comfortable with how much equity I have in
my portfolio. And what one really smart advisor told me
was use this as a little bit of a test
as a sign, like, how did the past week make
you feel? Were you comfortable seeing that four to oh
(11:50):
one k go down? Or was it just too much?
And if it was just too much, you might need
to change into less risky assets. You might need to
think about out maybe more bonds, you might need to
think about holding more cash. It's just sort of a
sign that maybe the way that you've allocated your portfolio
isn't right for you.
Speaker 2 (12:12):
So that's what experts are saying you do right now
to get through this period of market uncertainty. But what
about down the road that's next. On Wednesday morning, just
(12:33):
before the White House announced a pause of some tariffs
that sent market surging, President Donald Trump posted on truth
Social Be Cool. He said, this is a great time
to buy. I wanted to ask Bloomberg Personal finance reporter
Charlie Wells if he was hearing the same from financial experts.
Should everyday investors start moving money into the market.
Speaker 1 (12:55):
So I'll give you a qualified yes, And it's not
a terrible time to buy the dip if and this
is a big if you have the time horizon, you
have the risk tolerance, and you have the cash to
do it. So the big picture idea here is that
when the stock market goes down in a lot of ways,
it means that a lot of high quality companies that
(13:15):
maybe were overvalue, that maybe were just expensive, there are
prices come down, and there's a high likelihood that at
some point in the future, maybe even the near future,
there are prices will go back up again. And so
if you're someone who has their emergency fund covered, if
you're someone who has paid off high interest debts, then
(13:36):
maybe this is something that you could think about and
really kind of in the broadest strokes, people who are
further away from retirement, who have a lot more time
for the stock market to recover, or in a position
where they could do this. And so yes, every financial
advisor that I called this week told me that now
could be a good time to buy the dip if
you do it in a responsible way.
Speaker 2 (13:58):
Are there any industries that financial experts say are better
safer bets right now? Any industries that have generally been
recession proof.
Speaker 1 (14:07):
So I get a lot of vanilla answers when I
ask about this, and advisors are always really reluctant to
tell me, you know, go into this particular industry. When
advisor in California talked about how, you know, there is
some concern about the direction of the US and if
that is a conviction that you have, you might want
to look at global companies global indices as well. And
(14:30):
then you know, generally in times of recession, people talk about,
you know, investing in areas that consumers are still going
to spend on even if they've lost their jobs, right,
So that would be consumer staples, healthcare, the sorts of
things that people need to buy regardless of how flush
they're feeling. But the important thing here really, and I
(14:50):
just this comes up all the time, and I think
it is because it is good advice. You want to
be diversified, and it's so fun to think that you've
got the insider info on one particular company, but they're
the high probability is you might not know as much
as someone whose entire job it is to follow stocks,
to follow a particular company, and so diversification really is important.
Speaker 2 (15:15):
Well, right, what about other places to investor capital outside
the stock market, like buying property or buying commodities like golds?
What do experts say the move is there?
Speaker 1 (15:27):
So, you know, I think for the average investor, it's
really hard to find, you know, the right balance. I
think diversification is important. I think a lot of portfolios,
especially for younger people, probably should be, you know, more
in stock than almost anything else. But we're inundated with
thin influencers, with internet articles about you know, storage units
(15:51):
and rental properties and all of this stuff. And one
very real conversation I have with a financial advisor we
address these kind of alternate investment ideas, and you know
what he told me was, if you want to invest
in something, the best thing that you can invest in
is your job, because you know what the return is
(16:12):
going to be on that investment, you know what the
risks are, and actually the amount of money that you
get from your job is probably a lot more than
it's going to be from a storage unit business that
you take part in. And then think about things like gold.
I mean, it's reaching peaks right now. I think people
have tried to count out gold for a long time. Obviously,
(16:32):
owning physical gold is more challenging than stocks. There are ETFs,
of course that you can buy, but you know, small
allocations here, I think really kind of sticking to the
bread and butter is what most mainstream advisors would recommend.
Speaker 2 (16:46):
That's so funny. He's like, get off TikTok, stop browsing
commodities markets, just do your job. Literally that well, it's
really hard to time the market, as we've been talking about,
especially in a volatile whip sawing period like this. But
what about timing other money moves. We've been reporting at
Bloomberg on some consumers panic buying certain products. What do
(17:07):
the experts say about these sorts of purchases, whether it's
a car or like a home appliance like an air conditioner.
Speaker 1 (17:14):
So the best practice is to ask yourself do you
need it and can you afford it? And if you
can answer yes to both of those questions, you should
probably buy it. But there's a flip side here where
you know, some economists have been saying that these terriffs
could eventually lead to a recession in recessions, companies often
have to discount because demand goes down, so you don't
(17:37):
want to get into a position where you've rushed to
buy something to try to beat tariffs, and then this
hypothetical world of a recession sets in and then things
got cheaper.
Speaker 2 (17:48):
I asked you last time we spoke about whether pulling
out of the stock market altogether would be a strategic
move if the safest place for your money was under
your mattress. You said. Advisors were saying, essentially, keep putting
a study amount into the market over time, in part
as a hedge against inflation. What about now, Has anything changed?
Speaker 1 (18:09):
I would say no. In fact, I would say that
the standard advisor, who knows that you've got all your
basis checked, would say keep investing, keep going, because even
in the past few days, we've seen these significant drops,
but as we've been talking about whipsawing, we've also seen recoveries.
And that is kind of in a nutshell what happens
(18:29):
in the stock market. You know, it feels like decades
have been compressed down into days. But if you take
what's happened over the past few days and then stretch
it out over many decades, That's what happens. It goes up,
it goes down, and then goes back up again.
Speaker 2 (18:51):
This is the Big Take from Bloomberg News. I'm Sarah Holder.
This episode was produced by David Fox. It was edited
by Patty Hirsch and Brian Chapata, fact checked by adrian
Na Tapia, and mixed and sound designed by Alex Suguia.
Our senior producer is Naomi Shaven. Our senior editor is
Elizabeth Ponso. Our deputy executive producer is Julia Weaver. Our
(19:11):
executive producer is Nicole Beamster. Boord Sage Bauman is Bloomberg's
head of podcasts. If you liked this episode, make sure
to subscribe and review The Big Take wherever you listen
to podcasts. It helps people find the show. Thanks for listening.
We'll be back tomorrow.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
It's been a bewildering week for retail investors trying to
make sense of global markets. After US President Donald Trump
unveiled sweeping new tariffs, we saw ten trillion dollars in
stock market value disappear. The US president is doubling down
on an economic policy that most economists think is de
anchored from reality. Then came Wednesday's stunning rebound, remarkable rally
(00:34):
we're seeing in the markets right now, up nearly ten
percentage points on the Nasdaq, and today markets have slid again.
Yesterday's terraf for Pree did not last long, with Ustok's
lab resuming their declined bonds not getting much love, the
dollar sliding, and corporate credit default risks rising. Meanwhile, the
US and China, the world's two largest economies, have continued
(00:54):
to ramp up the pressure on each other with a
series of compounding tariffs. President Trump's tariff on Chinese imports
have reached one hundred and forty five percent, factoring in
a twenty percent levee placed on China over its role
in fentanyl trafficking, and China has said it's raising tariffs
on US imports to eighty four percent. Bloomberg's Charlie Wells says,
(01:17):
all of this creates a lot of uncertainty for businesses,
which translates into uncertainty for investors of all kinds.
Speaker 1 (01:25):
We actually had a Bloomberg report about Walmart telling a
company just a few days ago in China not to
put sticker prices on Christmas ornaments because there's just so
much uncertainty about how much things are going to cost
come Christmas. So, you know, beyond ninety days, beyond this
pause that Trump has put into place, there's still going
(01:46):
to be a lot of uncertainty and that's probably going
to play out in the stock market too.
Speaker 2 (01:49):
As a personal finance reporter, Charlie hears from a lot
of people looking for guidance from experts on what financial
moves they should be making. And he says, these past
few weeks, everyone's been wondering the same thing.
Speaker 1 (02:02):
So the big question that I get is really simple,
but it's a really hard one to answer, and it's
what should I do with my money? Right now?
Speaker 2 (02:13):
I'm Sarah Holder, and this is the big take from
Bloomberg News today on the show. In the midst of
all this uncertainty. We're going to take a look at
your money. We'll here expert advice on what to do
with it right now and in the weeks and months ahead.
Wild swings in the stock market are anxiety inducing for
(02:36):
all kinds of investors. So if you're nervous, you're not alone.
Charlie says he's heard from a lot of readers this week,
including someone who did the one thing financial experts really
don't want their clients to do.
Speaker 1 (02:49):
She said that she was so relieved that she sold
out of her stock portfolio. And this was someone in
her thirties. This is someone who has a long time horizon,
who you know, any expert would say has a really
high risk tolerance. Instead of kind of staying in the
market as most financial advisors would recommend, she sold out
and is sitting in cash. And that's kind of not
(03:09):
the sort of thing that you're supposed to do, But
it represents the level of fear that there is in
the market right now. It represents the fact that people
are really trying to navigate the uncertainty right now, and
a lot of people think that that's just being in cash,
but that's not a great idea, and we just have
so much data on that. When you sell, you lock
in the loss, but when you stay in the market,
(03:33):
it's just a paper loss that very likely is going
to recover.
Speaker 2 (03:37):
What about if you have less risk tolerance, if you're older, say,
if you're nearing retirement.
Speaker 1 (03:42):
This is one of the issues that has been really
difficult lately. People who need to sell because they are
going to leave the workforce because they are retiring. And
a lot of people had asked, you know, how much
stock should I have? Is this market going to keep
going up and up? And a lot of you know,
people who were nearing retirement I think, were maybe a
(04:04):
little bit overly optimistic about the trajectory of the stock
market because one of the things that we know is
that you know, it does recover after downturns, but it
also turns down, and so just getting caught up in
some of this timing I think has been difficult for
a lot of retirees. And there's been this temptation over
(04:25):
the past two three years, as we've seen this huge
stock rally to maybe over allocate to stocks because it
seems like the good times are going to keep on rolling.
As we learned over the past week they're not.
Speaker 2 (04:40):
Well. One of the things that investors have been paying
particular attention to, something we covered on The Big Take yesterday,
where the swings in the bond market. Earlier this week
we saw the selloff in US treasuries which sent yield surging.
Can you explain why that's such a big deal.
Speaker 1 (04:55):
It's a big deal because it was really unusual. And
so usually what happens is is when there's a lot
of fear in the stock market, investors want to go
someplace safe. They want to go someplace where they know that,
you know, they've got the full faith and credit of
something that's really responsible, and usually that is the US
(05:16):
government bond market. Those are US treasuries that people tend
to turn to, and so when stock prices go down,
people usually want US treasuries, these bonds, and so those
bond prices go up and then the yields go down.
But this past week, something really weird happened, and it
was that as stocks went down, prices went down, which
(05:38):
meant that bond yields went up. And this is just
not something that we're used to seeing in financial markets.
Speaker 2 (05:45):
Well, if US treasuries are looking less safe, what does
that mean for the typical sixty forty split many of
us think of as classic investing advice for portfolios.
Speaker 1 (05:56):
Yeah, so I think that, you know, the sixty forty
is a very you know, time tested strategy. It's been
under pressure over the past few years of kind of
getting the right mix between stocks and bonds, getting risk
from stocks with the safety of bonds. And I think
if there is this belief that US treasuries are not
as secure, you know, as we've known them to be
(06:18):
for so many decades, that maybe that strategy isn't a
smart one. But I think it's too soon to call
for the end of the sixty to forty portfolio. I
think that one point that financial advisors always make to
me is just because you're seeing one day this highly
unusual event in markets, that could look like evidence that
(06:40):
people no longer have full faith and confidence in the
in the United States, that there is concern about the
credit worthiness of the United States. You might feel that
one day, but then the next things start to recover
and we move on, and so making a kind of
drastic change changing some of these fundamental assumptions that we
have can be really dangerous.
Speaker 2 (06:58):
I want to make sure people understand that the significance
of higher yields in the bond market, how might that
show up in people's everyday lives.
Speaker 1 (07:06):
Yeah, so you know, the everyday person isn't necessarily sitting
around thinking about the yield on the tenure treasury. But
ten year treasuries are really important because they're benchmarks for
a lot of the consumer products, the kind of consumer
borrowing that we see in the everyday economy. So the
ten year treasuries used as a benchmark for thirty year mortgages,
(07:28):
It influences student loan borrowing rates, credit card rates, and
so it really does trickle down into the everyday economy.
So if you're seeing that yield go up really high,
that means basically that you know, mortgage prices will eventually
be higher, that the amount that it costs to borrow
will be higher because that benchmark that so many lenders
(07:51):
use has gone up.
Speaker 2 (07:53):
So, Charlie, people are coming to you asking what should
I do with my money right now? Bloomberg recently published
a piece about investing in time of market uncertainty, and
one thing that the experts who spoke to Bloomberg encourage
everyday investors to do was evaluate their portfolios. What does
that actually look like in practice, and what do experts
say people should do right now?
Speaker 1 (08:13):
Advisors usually say, you know, before you make any moves
at all, before you try to take advantage of moves
in the market, Before you know, you try to buy
the dip. As we hear a lot of people talking about,
you just want to make sure that you're in a
really safe, comfortable financial position where if the uncertainty in
the stock market translated into say the job market, and
(08:35):
you were to lose your job, you would be okay
for the length of time that it might take for
you to find another job. And so really step one
whenever we're in a time of uncertainty is to make
sure you've got an emergency fund that you know. That
number on the emergency fund varies from as little as
three months to a year, but advisors really say, you
want to have three months to a year's worth of
(08:58):
salary socked away just so you can absorb any shocks.
So that's kind of step one. And even if you've
got that, even if you've you know, you feel like
your savings are pretty good. Something that you can do
in a moment like now is just to kind of
take stock just just to check in. I think a
lot of times we've got you know, some savings in
one bank account, we've got you know, eye bonds somewhere else,
(09:19):
we put you know, the four oh one k in another,
and just kind of getting it all organized. Really is
step one.
Speaker 2 (09:25):
One of the first steps for people right now might
be to take stock of where they're at. But something
we keep hearing is don't look at your four to
oh one k. Is there a point at which that changes?
Is there a point where financial advisors say people should
jump in, should look closer at their four oh one
ks in a time of market uncertainty.
Speaker 1 (09:44):
Yeah, So advisors don't like people to look at their
long term investments because you know, historically, we know that
stock markets recover that anyone who does look at their
four oh one k now is probably going to see
a really disappointing dip. But that doesn't mean that you
can't do nothing. And I think one of the points
(10:04):
that I've heard from experts over the past few weeks is,
you know, now could be a good time to kind
of reassess your investment strategy and dollar cost average. If
you do want to make some kind of change. And
so what that means is, instead of say, you know,
dumping a bunch of cash into the market right now,
(10:26):
you might take a certain amount and put it in
over a fixed amount of time. So say, instead of
putting you know, ten thousand dollars into the stock market
right now because you think prices are really good, you
might put two thousand into the market for the next
five months. And what that does is it helps you
get access and exposure to the stock market, but without
(10:49):
necessarily risking the fact that stocks could keep going down
from here right. I think that's one of the main concerns,
and that's one of the reasons why advisors don't like people,
you know, looking at these long term investments too much,
because it could make them feel like, oh, my goodness,
you know, Apple's down, Tesla's down, everything's down. I'll get
(11:09):
a great discount. Dollar cost averaging allows you to kind of, yes,
clock some of what seems like a discount now, then
also hedge the fact that these stocks could be discounted
even more in the future.
Speaker 2 (11:22):
So it's not just don't look at your four owe
k because it might make you super anxious. It's don't
look at your four o one k because you don't
want to make rash decisions.
Speaker 1 (11:30):
That's right, But also you can make decisions and you
can look to see, like, you know what, maybe I'm
not as comfortable with how much equity I have in
my portfolio. And what one really smart advisor told me
was use this as a little bit of a test
as a sign, like, how did the past week make
you feel? Were you comfortable seeing that four to oh
(11:50):
one k go down? Or was it just too much?
And if it was just too much, you might need
to change into less risky assets. You might need to
think about out maybe more bonds, you might need to
think about holding more cash. It's just sort of a
sign that maybe the way that you've allocated your portfolio
isn't right for you.
Speaker 2 (12:12):
So that's what experts are saying you do right now
to get through this period of market uncertainty. But what
about down the road that's next. On Wednesday morning, just
(12:33):
before the White House announced a pause of some tariffs
that sent market surging, President Donald Trump posted on truth
Social Be Cool. He said, this is a great time
to buy. I wanted to ask Bloomberg Personal finance reporter
Charlie Wells if he was hearing the same from financial experts.
Should everyday investors start moving money into the market.
Speaker 1 (12:55):
So I'll give you a qualified yes, And it's not
a terrible time to buy the dip if and this
is a big if you have the time horizon, you
have the risk tolerance, and you have the cash to
do it. So the big picture idea here is that
when the stock market goes down in a lot of ways,
it means that a lot of high quality companies that
(13:15):
maybe were overvalue, that maybe were just expensive, there are
prices come down, and there's a high likelihood that at
some point in the future, maybe even the near future,
there are prices will go back up again. And so
if you're someone who has their emergency fund covered, if
you're someone who has paid off high interest debts, then
(13:36):
maybe this is something that you could think about and
really kind of in the broadest strokes, people who are
further away from retirement, who have a lot more time
for the stock market to recover, or in a position
where they could do this. And so yes, every financial
advisor that I called this week told me that now
could be a good time to buy the dip if
you do it in a responsible way.
Speaker 2 (13:58):
Are there any industries that financial experts say are better
safer bets right now? Any industries that have generally been
recession proof.
Speaker 1 (14:07):
So I get a lot of vanilla answers when I
ask about this, and advisors are always really reluctant to
tell me, you know, go into this particular industry. When
advisor in California talked about how, you know, there is
some concern about the direction of the US and if
that is a conviction that you have, you might want
to look at global companies global indices as well. And
(14:30):
then you know, generally in times of recession, people talk about,
you know, investing in areas that consumers are still going
to spend on even if they've lost their jobs, right,
So that would be consumer staples, healthcare, the sorts of
things that people need to buy regardless of how flush
they're feeling. But the important thing here really, and I
(14:50):
just this comes up all the time, and I think
it is because it is good advice. You want to
be diversified, and it's so fun to think that you've
got the insider info on one particular company, but they're
the high probability is you might not know as much
as someone whose entire job it is to follow stocks,
to follow a particular company, and so diversification really is important.
Speaker 2 (15:15):
Well, right, what about other places to investor capital outside
the stock market, like buying property or buying commodities like golds?
What do experts say the move is there?
Speaker 1 (15:27):
So, you know, I think for the average investor, it's
really hard to find, you know, the right balance. I
think diversification is important. I think a lot of portfolios,
especially for younger people, probably should be, you know, more
in stock than almost anything else. But we're inundated with
thin influencers, with internet articles about you know, storage units
(15:51):
and rental properties and all of this stuff. And one
very real conversation I have with a financial advisor we
address these kind of alternate investment ideas, and you know
what he told me was, if you want to invest
in something, the best thing that you can invest in
is your job, because you know what the return is
(16:12):
going to be on that investment, you know what the
risks are, and actually the amount of money that you
get from your job is probably a lot more than
it's going to be from a storage unit business that
you take part in. And then think about things like gold.
I mean, it's reaching peaks right now. I think people
have tried to count out gold for a long time. Obviously,
(16:32):
owning physical gold is more challenging than stocks. There are ETFs,
of course that you can buy, but you know, small
allocations here, I think really kind of sticking to the
bread and butter is what most mainstream advisors would recommend.
Speaker 2 (16:46):
That's so funny. He's like, get off TikTok, stop browsing
commodities markets, just do your job. Literally that well, it's
really hard to time the market, as we've been talking about,
especially in a volatile whip sawing period like this. But
what about timing other money moves. We've been reporting at
Bloomberg on some consumers panic buying certain products. What do
(17:07):
the experts say about these sorts of purchases, whether it's
a car or like a home appliance like an air conditioner.
Speaker 1 (17:14):
So the best practice is to ask yourself do you
need it and can you afford it? And if you
can answer yes to both of those questions, you should
probably buy it. But there's a flip side here where
you know, some economists have been saying that these terriffs
could eventually lead to a recession in recessions, companies often
have to discount because demand goes down, so you don't
(17:37):
want to get into a position where you've rushed to
buy something to try to beat tariffs, and then this
hypothetical world of a recession sets in and then things
got cheaper.
Speaker 2 (17:48):
I asked you last time we spoke about whether pulling
out of the stock market altogether would be a strategic
move if the safest place for your money was under
your mattress. You said. Advisors were saying, essentially, keep putting
a study amount into the market over time, in part
as a hedge against inflation. What about now, Has anything changed?
Speaker 1 (18:09):
I would say no. In fact, I would say that
the standard advisor, who knows that you've got all your
basis checked, would say keep investing, keep going, because even
in the past few days, we've seen these significant drops,
but as we've been talking about whipsawing, we've also seen recoveries.
And that is kind of in a nutshell what happens
(18:29):
in the stock market. You know, it feels like decades
have been compressed down into days. But if you take
what's happened over the past few days and then stretch
it out over many decades, That's what happens. It goes up,
it goes down, and then goes back up again.
Speaker 2 (18:51):
This is the Big Take from Bloomberg News. I'm Sarah Holder.
This episode was produced by David Fox. It was edited
by Patty Hirsch and Brian Chapata, fact checked by adrian
Na Tapia, and mixed and sound designed by Alex Suguia.
Our senior producer is Naomi Shaven. Our senior editor is
Elizabeth Ponso. Our deputy executive producer is Julia Weaver. Our
(19:11):
executive producer is Nicole Beamster. Boord Sage Bauman is Bloomberg's
head of podcasts. If you liked this episode, make sure
to subscribe and review The Big Take wherever you listen
to podcasts. It helps people find the show. Thanks for listening.
We'll be back tomorrow.
Hosts And Creators
Sarah Holder
Saleha Mohsin
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