Industry veterans Ed Slott and Ric Edelman are counseling advisors and their clients to stay the course after markets plunged Thursday on news that President Donald Trump imposed tariffs of at least 10% on all imports.
"On days like this — and [Thursday’s] may be a record decline — it’s best to do nothing," Slott of Ed Slott & Co., told ThinkAdvisor in an email.
Roughly $1.7 trillion was erased from the S&P 500 Index at the start of trading on Thursday, Bloomberg reported.
"Nothing is lost if you don’t panic and sell," Slott said.
With Trump vowing for months to impose tariffs, "no one can legitimately claim to be surprised" by Trump’s announcement, added Edelman, founder of the RIA Edelman Financial Engines who now leads the Digital Assets Council of Financial Professionals, in another email. "Nor can anyone be surprised by the market’s reaction to the news. Since you knew it was coming and you chose not to sell equities prior to the news, you certainly should not sell now."
Such clients, Edelman continued, "made the commitment to remain invested, and you must now honor that commitment. Otherwise, you’ll merely be guilty of selling low, and that is a sure way to financial failure."
Keep in mind "the market’s selloff is the direct result of a presidential policy. And just as that policy is causing stock prices to fall, a reversal of that policy — which is inevitable — will cause prices to skyrocket," Edelman said. "You’re immersed in the fall, so be patient and wait for the recovery. And in the meantime, consider this one helluva buying opportunity."
Looking ahead, "markets recover over time," Slott relayed, "markets don’t respond well to uncertainty and we are now in uncharted territory."
The stock mark "plunge is obviously concerning," Slott added. "Still, the worst thing to do is to make emotional drastic moves or change your plans. Wait until things calm down, and they will, because the market won’t tolerate this for too long. There’s too many interests at stake here and this will eventually be corrected."
Pictured: Ed Slott
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