Stick to the plan
Cover image is a still from Mad Money, the last place you should look in times of crisis. April 8th, 2025
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”
A history lesson
On April 2nd, President Trump had announced his plan of reciprocal tariffs on the imported goods of many of our largest trade partners. Reacting to this news, investors sold stocks en masse, and the S&P 500 index fell 12% over the next 6 days.
On the evening of April 8th, I sent an email to all our investment management clients, assuring them that this market correction will blow over, just like every market correction in the past (though there are never any guarantees, of course!)
The very next morning, I placed orders in many of those same clients’ accounts to buy shares of an S&P 500 index fund. By the end of the day – after President Trump announced a delay on the implementation of those tariffs – those purchased shares had increased in value significantly, and most of the losses of the past week had been erased.
Am I a soothsaying market wizard? Absolutely not! In fact, if I had placed the same trades just a week earlier, I would be telling a story that is completely different. Rather, I invest with a plan, and one of the principles I follow is never to react to rapid fluctuations in the market.
When the “value” of our country’s largest companies can swing 10% weekly on the words of a single man, it’s foolish to invest any other way.
If you were shook by the stock market events of April or if, God forbid, you panicked and went to cash at the bottom, I encourage you to consider talking to a professional investment manager. A good investment manager will create an investment plan that matches your objectives and, more importantly, will guide you and reassure you when it feels like your money is evaporating.
About the Author
Joseph Fowler, CFP® is a financial planner and co-owner of 402 Financial in Lincoln, NE.
402 Financial helps people who are in or nearing retirement spend their money. Joe always acts as a fiduciary and never takes commissions on product sales.
If you are considering retirement, click this link to see if you have enough.
