Keep calm and avoid panic selling
Michael Pate, senior portfolio manager at Wellington-Altus Private Wealth Inc., says he’s been helping calm clients and reminding them that a balanced portfolio means they’re not taking the brunt of the equity losses in the news. “It’s just a matter of talking them off the ledge and reminding them they have an asset allocation for a reason.”
For those who are truly losing sleep over the portfolio losses, he advises trimming their equity exposure to ease the stress, but he also emphasizes the importance of not panic selling and instead riding through the volatility. “If you need to sell something, sell something and just reduce down, sell it to the sleeping point, so you can sleep at night and know you’ve done something.”
The market is still digesting the shock of tariffs that, as Pate notes, were not based on the tariffs of other countries but on a formula that “made absolutely no sense. It was made up out of thin air.”
But at some point, there will have to be some give on tariffs, he said. “I just have a hard time seeing Trump flying the plane into the mountain, like, at some point he’s going to lift up. Somebody will get a hold of things and calm it down.”
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Avoid making decisions based on short-term swings
As the situation eases, investors could take a look at their allocations, but such decisions shouldn’t be made because of short-term swings.
“You don’t make major changes to your asset allocation because of what’s happening over a two-day period or a two-month period or even a five- or six-month period,” said Pate. “As long as you’re systematically changing that as you go over time, you’re constantly coming back to the right level.”
While Trump’s policies are creating dramatic threats to global trade that are resulting in serious recession fears, Maiorino said it’s important to remember to focus on the long term.
“Every time you’re in the midst of this type of market volatility, it feels different than the time before and the time before that,” he said. “We’re looking at a long-term view and these things will work themselves through.”
