Gary Cohn has resigned as President Donald Trump’s chief economic adviser over proposed steel and aluminium tariffs, leading to the Dow dropping 300 points today.
Why are the markets spooked? Because Cohn’s exit “signals that the Trump administration is absolutely going to move forward with tariffs and the risk of a trade war is now more elevated,” Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, told CNN Money.
So, is there anything you should do right now? No one can time the market, and no one knows what will happen. But the market is more than Gary Cohn. So here’s when I say what I say every time there’s a market movement:
“Regularly make investments, maybe monthly or weekly,” says Lou Haverty, a certified financial analyst. “By making small but regular contributions, you’ll have the benefit of investing during all market conditions. So in hindsight, you’ll get the benefit of investing after market corrections.”
Understand that this is normal, even if it hasn’t been for nearly the past decade. “People kind of forget what it’s like to have a downturn,” Scott Hanson, co-founder and senior partner at Hanson McClain Advisors, told CNBC. “It’s prudent to be prepared for one.”
“Right now, the market is disappointed, but one player’s not going to change the outlook for the economy,” Doug Cote, chief market strategist at Voya Investment Management, told Marketwatch. “I would say the market is overreacting and I would buy the dip.”
“Set up a monthly recurring investment in a ETF or diversified portfolio, so that you ensure you buy on the decline and profit on the other side,” suggests Evan Tarver, a financial analyst at Fit Small Business.
Check in on Your Retirement Fund
If you’re, say, five to 10 years away from retirement, you “should consider becoming more defensive,” says Michael Dinich, a retirement planner at Your Money Matters.
“At this point it is more important not to lose money than it is to get the highest return possible,” says Dinich. “If your retirement/investment success is dependent on ‘swinging for the fences’ and consistently hitting homers, the plan is unlikely to succeed.” He advises people near retirement to look into indexed and variable annuities. You’ll want to check the fees, which can be high, and consider whether the price is worth the potential gain.
And focus on things you can control, such as building up your cash savings, or learning new skills for in-demand careers that can help you, should a bear market roll in.