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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 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 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, all of this creates a lot of uncertainty for businesses, which translates into uncertainty for investors of all kinds.
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 to be a lot of uncertainty and that's probably going to play out in the stock market too.
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.
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?
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 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.
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 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, it's just a paper loss that very likely is going to recover.
What about if you have less risk tolerance, if you're older, say, if you're nearing retirement.
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 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 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.
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.
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
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 meant that bond yields went up. And this is just not something that we're used to seeing in financial markets.
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.
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 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 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.
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.
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, 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 use has gone up.
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?
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 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 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, we put you know, the four oh one k in another, and just kind of getting it all organized. Really is step one.
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.
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 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, 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 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
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.
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.
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 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.
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 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.
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 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 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.
Are there any industries that financial experts say are better safer bets right now? Any industries that have generally been recession proof.
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 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 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.
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?
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
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 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, 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.
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 the experts say about these sorts of purchases, whether it's a car or like a home appliance like an air conditioner.
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 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.
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?
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 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.
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 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.