The Market Just Did What?
- Caitlin Muldoon
- Apr 10
- 3 min read
Well- there I was about to queue up a newsletter on what to do when market tailspins are driving friends and family to pull their assets OUT of the stock market. And then… the S&P rebounded in a massive way. In fact, yesterday it recorded the highest trading volume in history- all due to news of temporary tariff rate drops (for most countries).
Because I (personally) don’t expect this to be all that a 2025 bear market wrote, I’ve decided to ship you this article anyway, and perhaps especially, now that we’ve had a taste of this wild ride.
Times like these often pressure us into taking action- a way to control a situation that is otherwise spiraling beyond our grasp. Taking action isn’t a bad thing, but the wrong one can cost us decades of financial freedom. This week, I’d been startled after talking to several people thinking of taking detrimental action: pulling money out of the market- not because they need it, but because they can’t stand to watch their portfolio slide. Already, those folks have experienced pretty massive losses because they sold their assets low, and missed out on benefiting from Wednesday’s market surge.
Get Grounded 🧘♀️
Let’s reframe for a moment: market losses don’t become our losses unless we sell those assets that are down. If you don’t need the money in your portfolio right now, there aren’t a lot of reasons to sell, and therefore- you may not have to realize any of those losses.
If you are living off of your portfolio (like I am), this time highlights the importance of diversification. Not all assets and not all asset classes are down. If you’re investing in fixed income, then there’s a strong chance your income hasn’t been impacted and that income source may allow you to avoid selling other assets that might be down. If you’re invested in foreign markets, or real estate, you may still be getting dividends, or income from those asset classes as well. If you have extra cash, you may decide to live off of that cash for a while until you need to sell any assets.
Either way, when the market behaves the way it’s behaving now, we have opportunities to take actions that don’t require us to sell- even actions that don’t require us to “buy the dip”.
Action > Fear
Opportunistic actions present themselves during market turmoil:
Roth Conversions
Either a lower tax bracket, or a lower value of assets being converted to a Roth IRA can create opportune times to do a Roth conversion- when both of these factors exist, it might be an excellent time.
Tax-Loss Harvesting
We have the opportunity to use losses we realize in our portfolios to offset other gains. Newsflash: there have been some losses! While it's not for everyone, now might be an ideal time to perform some tax-loss harvesting.
Suspend Excess Payments on Low-Interest Debt
Keeping more cash on hand is not a bad idea during economic uncertainty. This can help cushion our emergency funds, prevent us from having to sell assets when they are low, and can give us the opportunity to buy assets on sale. These reasons may be more attractive than paying down low-interest debt quickly. If they are, it might be a good idea to identify any low-interest loans you're making accelerated payments on (paying down more than required), and assess whether you reduce your payments temporarily.
Track Your Finances
If you don't already track your finances, now is a great time to start. Taking a look at your expense categories can be especially helpful in times like these, so you know where you might have the opportunity to cut spending. Whether you slash now, or make a plan for later, this can be a very settling exercise for your nervous system.
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