These Market Experts Give Calming Advice For A Chaotic Stock Market

Forbes

Will Trump’s tariffs and his assault on the federal government lead to a deeper crash, or even a recession? Market experts advise long-term investors and 401(k) holders to sit tight.  Read the full story on Forbes: https://www.forbes.com/sites/hanktucker/2025/03/13/calming-advice-for-a-chaotic-stock-market/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, calming advice for a chaotic stock market.

00:06While the last three weeks have been punishing

00:08for the stock market, veteran wealth managers

00:11are sounding a similar refrain for long-term investors.

00:14Don't panic.

00:16It can be difficult advice to heed

00:18when alarming headlines are regularly flooding the news.

00:22Two days after the S&P 500 index

00:24hit its all-time high on February 19th,

00:27hedge fund billionaire Steve Cohen

00:30made a prescient prediction that he wouldn't be surprised

00:32to see a, quote, significant correction in the stock market,

00:36calling tariffs an additional tax.

00:40On Tuesday this past week, J.P. Morgan economists

00:43raised their recession risk forecast for this year

00:46to 40% from 30%.

00:49The S&P 500 is down 9% from its high

00:52and seems destined to fall further.

00:55But history suggests changes in sentiment

00:58often happen much faster than investors expect.

01:01Just last year, when stocks fell 8.5%

01:05over three weeks in July and August,

01:07those losses were erased within a month.

01:10The same is true of the S&P 500's last 10% correction,

01:14which took place from July to October 2023.

01:18In fact, David Donabedian, co-chief investment officer

01:22of CIBC Private Wealth U.S.,

01:24which manages $84 billion in assets,

01:27says his firm researched, quote,

01:30true crises far more consequential

01:32than the current self-inflicted declines fueled by tariffs,

01:36shocks to the system like outbreaks of war

01:39or the onset of COVID-19.

01:41Donabedian says, quote,

01:43what you find is that about two-thirds of the time,

01:46the S&P 500 has recovered all that it lost

01:49after the shock in a month.

01:52The punchline is don't do knee-jerk selling,

01:54and we've certainly had some of those conversations

01:56in the last week or so.

01:59The primary culprit for the current stock market swoon

02:02is the uncertainty caused by President Donald Trump's

02:04imposition of tariffs on imports

02:06from China, Canada, and Mexico.

02:09Trump initially announced the tariffs

02:11over the weekend prior to February 3rd,

02:13but when the market opened that day down 2%,

02:16he changed course and granted Mexico and Canada

02:18a temporary 30-day reprieve

02:21following concessions they made

02:22to secure their borders with the U.S.

02:24Stocks quickly rebounded.

02:27That pause expired with Trump allowing the tariffs

02:29to take effect on March 4th,

02:31but he soon carved out exemptions for some goods

02:34subject to a trade agreement he signed during his first term.

02:37Since then, investors have become increasingly dismayed

02:40at Trump's uncharacteristic indifference

02:42to the stock market.

02:44Last Thursday, he told reporters he's, quote,

02:47not even looking at the market.

02:49This week, he walked back a threat to hike tariffs

02:52on Canadian steel and aluminum imports to 50%,

02:56but added a 25% charge on those metals

02:58shipped from any foreign country,

03:00leading to retaliatory tariffs imposed

03:03by the European Union on U.S. imports.

03:06The whipsawing is only adding to investors' uneasiness.

03:11Adrian Hilfert, Chief Investment Officer

03:13for Alternative and Multi-Asset Portfolios at Westwood,

03:17says, quote,

03:18We knew tariffs were negative for economies,

03:21but it's less the impact of the tariffs themselves

03:23than the uncertainty of the policy.

03:26Small and mid-sized businesses need to know what to expect

03:29so they can plan their capital expenditures.

03:32Uncertainty leads to businesses that are nervous

03:34to plan for a future that they don't know.

03:38Jim Baird, Chief Investment Officer

03:40at Plant Moran Financial Advisors, says, quote,

03:44For your average retail investor,

03:45the temptation is to say,

03:47I've got to do something during times like this,

03:49when the reality is, if you're a long-term investor,

03:52often your best decision is to stay out of your own way.

03:58For full coverage, check out Hank Tucker's piece

04:00on Forbes.com.

04:03This is Kieran Meadows from Forbes.

04:06Thanks for tuning in.

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