HUNTSVILLE, Ala. (WAFF)— The stock market has plummeted over the past week following President Donald Trump’s announcement that imports will be heavily taxed.
This has also led to many people’s 401k’s losing thousands of dollars.
On Friday, the stock market saw its worst drop since the COVID-19 pandemic began.
President Trump has maintained that these tariffs aren’t going anywhere despite the stock market drop.
The President has said that they are needed to even trade deficits that the U.S. has with other countries.
Aaron Howard is a financial planner at Cloud Investments in Huntsville.
Financial Planners with Cloud Investments in Huntsville, Aaron Howard, says the market is currently plummeting because investors are worried about the possible price hikes on common goods that will be passed down to people because of the tariffs.
The stock market tumble is also causing people’s 401k’s to lose thousands of dollars in value.
Howard said it might not be in your best interest to look at your 401k right now since the market should eventually bounce back.
However, he recommends reviewing your entire portfolio if you are getting close to retirement.
“Now you want to be very careful not to make emotionally charged decisions; those are statistically the worst thing that you can do,” said Howard. ”They usually lead to long-term potential damage to your overall portfolio. So there’s a very big difference in making a quick decision because you’re scared versus actually reviewing your portfolio for risk.”
Trump said Monday that he will impose an additional 50 percent tariff on all Chinese imports if China does not remove the 34 percent tax it imposed on American goods last week.
While it can be distressing to see your 401k lose so much value, he cautions not to make any sudden financial decisions.
“I’ve told anyone who’s called in and talked to us is that, ‘We are in this for the long haul,” said Howard. “We’ve developed a long-term plan, and we know markets go up and down. As much as it may feel, you just want to get out and protect yourself…Statistics tell us that is not the best option right now.’ You have to look at each individual on a case-by-case basis.”
The President has said that although the tariffs may cause a bit of short-term pain, they are needed to correct ongoing trade deficits that the U.S. has with other countries.
So far, Trump has downplayed any idea of removing the tariffs in the immediate future.
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