The stock market plunged Thursday (and yet again Friday) in reaction to President Donald Trump’s sweeping tariffs. But a Los Angeles financial adviser says there’s no need to panic.
The Dow and NASDAQ both had their worst day since 2020 on Thursday, with the so-called Magnificent Seven tech stocks – including Apple, Meta, and Amazon – falling about 20%. Eddie Chan with Perennial Financial Services said we could be in for a bumpy ride over the next few months as other countries likely retaliate with their own tariffs.
“What we don't know is what the consequences will be, because we don't know if these other countries are going to escalate,” he told KNX News’ Karen Adams.
During Trump’s first term in 2018, markets reacted poorly to the tariffs he imposed, and there was retaliation from China and the EU. If China escalates the trade war this time around, Chan said it could lead to a recession – but probably not as bad as the one in 2008..
If you're planning to retire soon, Chan said it’s time to do a cash flow analysis of your retirement investments.
“The reality is, if you had a 60/40 split between stocks and bonds – let's say you have 60% in stock, 40% in bonds – if you’re gonna be retiring in the next year, you could actually take or draw from the bond side of your portfolio and allow time to help you try to recover on the stock side,” he said.
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Chan said it’s important to have a diversified portfolio so that when the markets tank, you don't take as much of a hit.
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