The beginning of April’s erratic market moves was disorienting. On April 8th, the S&P 500 closed out its worst four-day stretch since the pandemic, falling over 12% after the administration announced tariffs that exceeded market expectations. About a week later, news that these tariffs would be suspended for most countries fueled a 9.5% market rally, the largest one-day gain since 2008.
What went under the radar during this time was that Monday, April 7th was an extremely volatile trading day in between the madness. The major indexes began the day sharply lower. The S&P fell as much as 4.7%, while the Nasdaq was down as much as 5.2%. Stocks surged (as high as +7%) after an originally thought to be fake headline circulated online that suggested President Donald Trump was considering a 90-day delay for tariffs, aside from China. Equity markets ended the day in the red on what was one of the most volatile trading days of the year so far.
Source: Bloomberg, FactSet, Standard & Poor’s, J.P. Morgan Asset Management. The 60/40 portfolio is 60% invested in the S&P 500 Total Return Index and 40% invested in the Bloomberg U.S. Aggregate Total Return Index. Cash represented by the Bloomberg 1-3 Month Treasury Index.
It can be tempting to try and trade when the market is moving this quickly, possibly thinking you can make a quick buck. Or perhaps you’re concerned about the ongoing volatility in capital markets and feel that going to cash right now may prevent further downside in your portfolio. However, this tends to be a losing strategy. History shows that, despite these periods of stress, the diversified portfolio dependably outperforms cash, with the likelihood of outperformance rising with the investment horizon. Investors should remain prudent and stick to the long-term plan. Investors should avoid letting short-term emotions about their portfolios drive long-term investment decisions that can have a material impact in the years to come. Well put together financial plans take into account both good and bad years for markets. If you have questions about how the recent capital market performance has impacted your portfolio or your long-term financial plan, please reach out to your advisor.
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Schneider Downs Wealth Management Advisors, LP (SDWMA) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). SDWMA provides fee-based investment management services and financial planning services, along with fee-based retirement advisory and consulting services. Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice. Registration with the SEC does not imply any level of skill or training.
