Barron's Headline: Trump Tariffs Are a Nightmare for Stock Markets. Next Quarter Could Be More Terrifying.
Me, to my advisor, on Tuesday: Hi [Name]—just an example of the news we are all seeing every day. All signs continue to point to down. Do we continue to believe in holding all equities for the entire ride down, however far it may go? This is not an order by us to sell, but rather a question about the efficacy of sitting back and watching what everyone appears to know is going to happen happen ... Does it continue to make sense to keep holding all of it during the easily foreseeable drop and hope we can make it up within several years, or does it make sense to shed at least some of it (sort of like a “sell in May [or in this case, April] and go away” kind of thing)?
Advisor: This market selloff is disconcerting on many dimensions. We do think it is temporary. Our recommendation is to stay invested. We think lower interest rates and an accommodative Fed will have a positive impact on stocks in Q2, Q3 and Q4.
So, hold on and ride it all the way down, make no changes, because it will come back starting in Q2, because this is all very normal and the market will respond to normal Fed policy.
OK.
FTR, I do believe he is right at least directionally. After the Great Crash of 1929, the market did come back to its previous level ... in 1954.