I don’t know about you, but since “Liberation Day,” thousands of dollars in my 401(k) have been “liberated” as the stock market nosedived. Unfortunately, I’m not one of the select billionaires who was in on Trump’s not-so-secret signal to buy stocks that he posted just hours before announcing the tariff pause that led to a sudden meteoric rise in the market. Of course, after that event, the market resumed its downward trend.
But I’m not alone. Gallup reports that 65 percent of people in its middle-income category — making $40,000 to $100,000 — own stocks, either directly or through their retirement plans. Nevertheless, investment strategists told USA TODAY that the recent dip is no reason for Americans with retirement accounts such as 401(k)s to panic, no matter what stage they’re at in life:
“The people who would be hurt by (the stock market dip) are the emotional ones who are likely to do something irrational,” said Sam Stovall, chief investment strategist at investment research and analytics firm CFRA Research. “That could be somebody at any age.”
Stovall also said younger Americans should stay the course with their investments and make sure to take advantage of the “free money” their company may be offering through a 401(k) match. If able, now may be the time to look into boosting their monthly contribution. At minimum, Stovall said they should aim to invest enough to receive the maximum match from their company.
For Americans nearing retirement, Stovall said there is likely still plenty of time to make up for lost ground from the most recent dip, especially since the stock market tends to bounce back quickly.
A historical analysis from CFRA shows that so long as the stock market doesn’t fall 20% or more and enter bear market territory, it takes on average four months to recover from a correction.
“Don’t let your emotions become your portfolio’s worst enemy,” Stovall said. “The only way to lose money is by selling what is down.”
Ryan Detrick, chief market strategist at financial services firm Carson Group, added that older Americans should, ideally, have a more diversified portfolio that’s able to weather selloffs.
“For someone closer to retirement, diversification is your friend,” Detrick said. “To have some gold, to have some bonds, to have some cash, to have some stocks … that should be what they’re thinking about right now.”
For me personally, I am already retired so the best I can do is to keep my 401(k) diversified. I still watch the market with great concern since I do have some stock funds in my portfolio. Also, the market is one indicator of the overall economic health of the country. As I write this on April 17, the Dow Jones average is down again over 500 points.
Trump, Musk and their cronies don’t have to care about losing thousands or even tens of thousands in market fluctuations but to those of us on more limited incomes, losses like that can be disastrous.