President Donald Trump’s tariffs and their effect have taken center stage this week. Stock markets have plummeted, and many are now concerned about how this will impact their investments, especially when it comes to 401(k)s. Financial planners say there isn’t a simple solution.
David E. Martin said, “Like everybody else in this country there’s a lot of what the heck is going on around us and there’s not very many easy answers.”
David Martin has been a financial planner for 43 years. He’s seen a little bit of everything over those years. But President Trump imposing tariffs on other countries the way he has this week is uncharted territory.
“Their products have been coming in and here’s the part that very few people talk about - our money is going out. That’s why we have the deficit of 35 trillion. They’re importing goods to us. They’re exporting our money,” said David E. Martin, MSFS.
That’s what President Trump has also said and on Wednesday, he officially went against tariff rates agreed to by the US and 122 countries during the 1980′s and 90s.
Martin said, “All those countries had tariffs on us already. All he’s doing is equaling them and for some reason he’s being looked at as the bad guy.”
Martin says the goal is to reset the economy, which won’t be an easy or predictable journey.
He explained, “Consumers consume less. Companies sell less. When they sell less, their profits go down. When their profits go down, their stock prices go down. When their stock prices go down, the consumer looks at their 401(k) and says I don’t have that much money, so they consume less.”
Martin says he moved his money out of the market 6 weeks ago, switching to cash and money markets. It’s something he’s also recommended for his clients, but says everyone’s situation is different depending on age and life circumstances.
“I don’t know when it starts to reverse course and that’s the scary part,” Martin said.
It’s unclear what the long-term impact will be, but experts say it’ll likely take some time for people’s 401(k)s to rebound
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