“These triggers can cause investors to feel anxiety, worry, concerned, depression or even desperation,” said Jose “Rafi” Rodriguez, a retired colonel of the U.S. Air Force and current retirement income certified professional, president of Rodriguez Financial Strategies LLC.
Whether it’s your retirement 401(k) plan or your own personal investment portfolio, sticking with your current investment strategy ― while also potentially looking at whether you have the right assets ― could be the answer for what to do in this latest market uncertainty.
“People really shouldn’t change their strategy just because stock prices go down,” said Matt Ingram, a senior lecturer at the Raj Soin College of Business at Wright State University.
The historical norm has been that stock prices tend to go up about two out of every three years, Ingram said.
“We tend to have drops in the market like this every three to four years, big drops every three to four years. That doesn’t mean that we have to really panic,” Ingram said.
The general business community appeared optimistic heading into 2025 at the possibility of deregulation under President Donald Trump’s second term, but tariffs also appeared to catch some investors off guard last week.
“Stock markets make big moves up or down on unexpected news, not expected news, and the market was not expecting the degree to which the new administration would be so aggressive with tariffs,” Ingram said.
Trump issued an executive order on April 2, which he dubbed “Liberation Day,” imposing a minimum 10% tariff on all U.S. imports effective April 5.
Higher tariffs between 11% and 50% were set to be imposed on 57 countries on April 9, but Trump suspended most, except those for China, in favor of a 90-day pause.
“At one time the market in mid-February was up about 5% for the year,” Ingram said. At the end of last week, it was down by about 9% for the year.
“It’s had about a 15 % change in value ... and that’s basically in about two months,” Ingram said. “So in two months, the markets have retreated significantly, and part of this is that people like stability in a government plan for trade.”
Prior to the 90-day pause on tariffs, the S&P 500, the index that sits at the center of many 401(k) accounts, started April 9 nearly 19% below its record set less than two months ago.
Following the start of Trump’s 90-day pause on most of his tariffs, the S&P 500 surged 9.5%, an amount that would count as a good year for the market, according to the Associated Press.
“It’s very difficult for corporations and individuals to forecast what the next year or two is going to look like because we don’t really know what this is going to do to the supply chains across the world,” Ingram said.
What does this mean for your 401(k)?
For people closer to retirement or who are using investments to save up to buy a home, this could be a time to take a look at your portfolio.
“Investors, especially those planning to retire soon or already in retirement, stay focused on your goals, review your risk tolerance, diversify your investments, increase your emergency and short-term savings and seek professional help,” Rodriguez said.
For those closer to retirement, their portfolios should be less reliant on stocks, Ingram said, which are riskier but can yield larger gains.
“The closer you are to retiring, the more conservative your investment strategy should be; that is, the closer you get to retirement, the fewer volatile assets you should own in your portfolio,” Ingram said.
The stock market has a history of going up over time, he said, but it has these windows of extreme volatility.
“We’re going through that now, where you have a 10 to 15% drop in just a couple of months,” Ingram said.
The alternative to owning stocks is owning something like a portfolio of bonds, he said. Bonds, like government bonds for example, tend to be more conservative.
“That is, their returns are lower, but they don’t move around as much as stocks do, so you don’t have that same exposure to your portfolio dropping 20% in a month or over,” Ingram said.
Younger people who may still have 30 years before they need to retire, the situation like last week may not be that big of a deal.
“Their portfolios have gone down in value, but you have plenty of time to make that up, and you’ll be contributing more and more money to your retirement plan,” Ingram said.
‘You don’t want to panic sell’
More volatility could still be to come. While it’s not all about tariffs ― concerns about the country’s deficit, inflation and interest rates are still in people’s minds ― the 90-day pause is a short amount of time for countries to conduct trade negotiations.
“These countries, outside of China, will certainly do their best to negotiate with the United States to try to get the tariffs lowered. They will certainly work hard,” Ingram said. “The real question is, can they get enough done in 90 days to really hammer out a significant deal because, in the past, large-scale trade agreements between countries and between economic unions have taken years to negotiate.”
That’s still not a reason to panic, though.
In every bear market ― which is a time where stock prices generally fall 20% from their top ― whether it was the 2000 dot-com bubble or the 2008 housing crisis, people who stuck with their investment plan usually ended up doing well even though things looked terrible at the time, Ingram said.
People can still take a look at their 401(k) plans or their personal portfolios, as well as seek the advise of a financial planner, to make sure they are confident about their investment strategy.
“What you don’t want to do is you don’t want to panic sell,” Ingram said.
You don’t want to make emotional decisions, because they could lead to bad decisions.
“If you have a good plan in place and you’ve talked to your financial advisor or you’ve done your research, then you should just stick with your plan. If something has worked up to this point, you should probably stick with it,” Ingram said.
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