Harris criticizes Trump in his first major speech since leaving office
Former Vice President Kamala Harris said in her first major speech since she left office that she has witnessed the “abandonment” of American ideals.
Needless to say, President Donald Trump’s first 100-day inauguration is rattling the stock market. The wider benchmark S&P 500 index fell by around 8% in Trump’s first 100 days, showing the worst performance of the index for this period since former President Gerald Ford’s first 100 days in 1974. Trump’s drastic tariffs caught the market off guard and only recovered after Trump announced a 90-day suspension. The possibility of a recession is on the rise, and the Trump tariff saga appears to be out of date. But if you’re worried about saving your IRA, read this first.
Maintaining your calm is paramount
It’s easy to become an investor when the market is rising as it has over the past few years. It’s a time of turbulence that tests investors. Investors are primarily active in the dark as Trump tries to transform global trade and bring back high-paid jobs in sectors like manufacturing to America, and try to negotiate better trade deals with other countries. With tariffs not so high, Trump is trying to change decades of trade policy overnight.
It’s easy to understand why investors are panicking, but the reality is that we’ve been here before. No, I’m not talking about tariffs or any other Trump policies. Rather, I am talking about an astonishing time of uncertainty when things seem to never be the same again. Other difficult periods like this include the Great Recession of 2008 (which actually did a few things) where major banks seem to fail, and the Covid-19 pandemic, where the economy appears to be shut down for months at a time. In both of these situations, many people thought the market would not recover. They may be right to think that things aren’t the same, but the market has always found its foothold.
SPX data by ^ycharts
Historical data shows that long-term investors who continue to invest will not lose money. According to BlackRock data, the US stock market never produced negative returns on a 20-year basis between 1936 and 2024. Since 1972, that number has not exceeded 12 years. In fact, volatility has become the norm in the 21st century. BlackRock has found that the market had fallen by nearly 15% within the year through 2024 over the past 20 years, but produced a positive return at 75% that year.
If you haven’t sold any of your positions in your retirement folder, remember that you haven’t lost anything yet. It is also very clear that short-term trading is a bad strategy. Using 100 years of data, UK multinational assets manager Schroders found that if they invested for a month, investors lost 40% of their time on an inflation-adjusted basis.
Furthermore, the data shows that the longer you hold your investment, the less likely you are to lose money. On the five-year horizon, the chances of losing money are reduced by almost half, but over the 10-year period, the chances of losing money are 13%.
Think about where you are on your investment journey
All investors are in different places in their lives. Some people are younger, they can be more aggressive or wait for things, but others need money faster. If you can’t wait for it and want to protect the current value of your portfolio, I recommend diversifying into a more secure asset, such as its gold, short-term financial liabilities, or certificates of deposit. Of course, you might want to talk to a financial advisor to discuss your particular situation, but there are alternatives.
However, the data clearly shows that if you can wait multiple years, your money is safe and likely to be potentially appreciated.
Bram Berkowitz has no position in any of the stocks mentioned. Motley’s fools have no position in any of the stocks mentioned. Motley Fools have a disclosure policy.
The Motley Fool is a partner at USA Today, providing financial news, analysis and commentary designed to help people control their financial lives. The content is produced independently of USA Today.
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