As President-elect Donald J. Trump prepares to take office, investors are worried about his policy agenda and its potential impact on the stock market. However, history suggests that past market performances do not guarantee future results.
In 2020, when the COVID-19 pandemic hit, many investors panicked and sold their stocks, missing out on gains in the subsequent months. A study by Vanguard found that only 1% of retail investors fled to cash during this time, but those who did saw lower returns than if they had remained invested. The S&P 500 eventually recovered and gained 16% by the end of 2020.
For retirees or families saving for college, it’s essential to review their investment portfolios to ensure they are still aligned with their goals. A cash cushion can help provide a financial and emotional buffer against market fluctuations. Consider consulting with a financial planner to create a diversified income stream plan.
By learning from past experiences, investors can make informed decisions about how to position themselves for potential market volatility under Trump’s presidency.
Source: https://www.nytimes.com/2024/12/26/business/trump-stock-market-investing.html