Trade wars hit the stock market – how can you protect your finances?
The World Trade War was hit by the stock market. This is how you can protect your finances.
Americans may have become much better at adjusting negative news and forecasts, at least when it comes to investment, a Wellsfront study suggests.
Individuals surveyed by the investment platform Wealthfront will continue to invest through US stock market volatility in April, which stems from President Donald Trump’s tariffs, with nearly 30% planning to invest more in US stocks in the future.
While that may seem counterintuitive considering the many disastrous forecasts of the economy and stock markets caused by the tariff war, “it could also be better for investors to deal with the constant flow of headlines and uncertainty that have recently shaped the market.”
Optimism rises
In May, 55% of respondents said they were somewhat or very optimistic about the US stock market for the next six months. This is significantly higher than 42% in April when we felt bright.
The improved atmosphere is likely to be driven by the postponement of tariffs and the growing perception that future trade policies are moderate than initially expected,” Michalka said.
Since Trump first announced his aggressive tariff plan on April 2, some of the best tariffs have been covered in ice as the administration attempts to attack trade deals. This week, the latest and undoubtedly most important consultations with Chinese officials in London, occurring in London.
Is it the worst?
Market volatility isn’t always over and can be uncomfortable for investors, but that’s a life fact, Mikalka said. Once people understand and accept it, it’s easier to maintain the course and remain optimistic.
“During Covid, inventory fell very quickly, but they returned very quickly,” said Nick Bour, founder and CEO of Inspire Wealth in Brighton, Michigan. “When you go out, you may miss a big bouncing off.”
Closed shares will rise 6% and will rise again in the year.
Plus, you could have done even better if you used the average of tax LOSS harvest and dollar cost during volatility earlier this year.
Weight loss harvesting means selling stocks that have lost money, recognizing losses and using it to offset profits made from capital gains or other holdings.
Averaging dollar costs is the purchase of stocks regularly, regardless of whether prices are falling or rising.
“Not only did you buy your investment “at a discount,” but you should have potentially valuable losses to use to lower your taxes next year,” Michalka said.
Medora Lee is a money, market and personal finance reporter for USA Today. You can contact her at mjlee@usatoday.com and subscribe to our free daily money newsletter for personal finance tips and business news every Monday to Friday morning.