If you were thinking about selling, I don’t blame you. When markets drop, our instinct is to stop the pain and avoid further loss. But then what? When do you get back in?
If this were a sell signal based on a rules-based system — something technical or fundamentally driven — that would make sense. But this pullback hasn’t come from a chart breakdown or disappointing earnings.
We all know what’s behind this: tariffs. And if you needed confirmation, you got it yesterday. The market opened down 3%, then dropped as much as 5% — again. Then a rumor hit that President Trump might pause tariffs for 90 days.
That’s all it took.
Within 35 minutes, the market rallied 8%. That’s trillions of dollars in value. The largest market in the world surged — on just a rumor that the White House later denied.
To put that in perspective: 8% is more than the average annual return for the S&P 500. Missing a move like that because you got spooked? That’s the kind of thing that can set a portfolio back years. And once it’s gone, it’s gone. You don’t get that exact chance again.
When markets are swinging this wildly on headlines, it’s best to sit on your hands and stick to the plan. Reacting in the moment usually feels good — and turns out badly. Sticking to a thoughtful, long-term plan might feel uncomfortable — but should turn out well.
Today reaffirmed my conviction in our approach:
Rebalance into stocks when they’re down.
If you need income, take it from bonds that are up.
Tax-loss harvest where it makes sense.
Keep making your 401(k) and IRA contributions.
This will all help ride it out. And if that’s not enough for you, check this out:
“The S&P 500 fell 10.7% over the last 3 trading days which was the 11th biggest 3-day decline since 1950. What has happened in the past following the biggest 3-day declines? Stocks were higher over the next 1, 3, 5 years every time.”
This post is an excerpt from a private client newsletter on 4/8/2025.