Last week, when the Dow lost over 700 points on one day and 400 the next, largely over fears of a trade war with China over President Trump’ new tariffs, I warned you that following stocks on a daily basis was like riding a roller coaster: it can make you feel dizzy and sick, but it’s better to ride it out than to try to jump off in the middle, when you’re near the bottom.
Well, it’s looking now as if all the bluster over a trade war (which neither side wants) was just posturing, the tariff threats might be just a negotiating tactic in the art of the deal, and now, the US and China are likely to sit down and hammer out some new trade terms. Result: on Monday, the Dow roared back by 669 points, the third-largest point gain in history. So I hope you didn’t bail out and sell on Friday.
If you just don’t have the stomach for the roller coaster, I have two suggestions: put your money into a safe, solid mutual fund and don’t look at the daily numbers, trusting that your investment will increase over time. Or just invest in bonds. That’s government debt, so you know it’s more like the carousel: it’ll just keep going around and around in circles forever and never disappear.