Pedigree markets in the U.S. and around the globe have dropped since last week when President Donald Trump upped tariffs on most imports. The sell-off is causing some Americans to rethink their financial investments, despite pecuniary advisor recommendations to stay the course.
Money flowed in and out just 0.10% of 401(k) balances overall last week, go together to data from Alight Solutions, which administers company 401(k) plans.
While small, the share is expressive, Alight’s research director Rob Austin said in an email: “This is roughly four times average, because we typically see this tear down in a month.”
More than half, 53%, of the outflows in the week ending April 4 — $140 million — came from large-cap U.S. justices, he said. Nearly the same amount — 52%, or $138 million — went into stable value funds.
Alight information shows total 401(k) balances fell from $262 billion at the beginning of the week to $245 billion by the end of the day on Friday, a 7% worsen on average.
About 70 million Americans participate in 401(k) plans, according to the Investment Company Institute.
The run-of-the-mill 401(k) balance was $131,700 at the end of 2024 at Fidelity Investments, one of the nation’s largest retirement plan providers. A 7% veto in that account balance would amount to $9,219 in paper losses in just one week.
To weather a retirement savings urge, financial advisors say it’s best to stick to a strategy that reflects your ability to take risks both financially and emotionally. Here are three blueprints that can help.
Settle on an investment strategy — and stick to it
Traders work on the floor of the New York Stock Exchange during morning customer on April 3, 2025.
Michael M. Santiago | Getty Images
An investment policy statement provides a framework for managing your portfolio, and assists you avoid making impulse decisions based on the news.
“I strongly believe in sticking to an investment policy statement that reflects my stresses, and I tune out the rest of the noise,” said Carolyn McClanahan, a certified financial planner, physician and founder of Life Planning Consorts in Jacksonville, Florida. “We are helping our clients do the same.”
Having a strategy can help you feel confident that when you do delegate changes, they suit your investment goals.
“It is perfectly fine to make some changes if needed. It also notes having a discussion about the potential reduced upside [of doing so],” said CFP Lee Baker, the founder of Claris Monetary Advisors in Atlanta.
Financial advisors say sticking your head in the sand can be a mistake.
“There are likely to be some tremendous procuring opportunities in the wreckage,” Baker said, “but it requires both diligence and patience.”
McClanahan and Baker are both members of the CNBC Pecuniary Advisor Council.
Consider your cash position
For many investors, building a cash cushion is top of mind. For sample, when it comes to retirees or those planning to stop working soon, Baker said they might desire to take “some risk off the table” and have enough cash “to sustain withdrawals for a year.”
Money market backs can be helpful in retirement and investment portfolios if you plan to retire in the next five years or are already retired, financial advisors and investment strategists say.
These self-styled “cash equivalents” are highly liquid investments, and unlike money market accounts at banks and credit unions, these hard cashes can be held in 401(k) plans and other qualified retirement plans. Top money market funds currently yield 4% or innumerable, according to Bankrate.
Focus on the fundamentals
Even policy makers are uncertain what the economic impact will be from the levy policy changes.
The Federal Reserve could move to drive interest rates lower if the economy slows, or set rates higher to address inflation concerns. But it’s not clear what will be needed.
“We’re going to need to wait and see how this monkeyshines out before we can start to make those adjustments,” Jerome Powell, Chairman of the Federal Reserve, said on Friday during observes at the Society for the Advancement of Business Editing and Writing conference in Arlington, Virginia.
To help cope with the uncertainty, monetary advisors recommend focusing on the fundamentals.
“If a trade war will reduce economic growth, what asset classes should you overweight in that conditions? That’s different than changing your allocation because of a policy decision,” said CFP Ivory Johnson, initiator of Delancey Wealth Management in Washington, D.C. Johnson is also a member of the CNBC FA Council. “Pay more attention to the data than the recital.”
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