Investors are encouraged to think long-term, especially if they are younger and aren’t planning to retire anytime soon.
Some investors, depending on their circumstances, are more risk-averse than others. And a risk-averse investor might be in the stock market or have a 401k, but also have some investments that are considered low-risk but low-ROI (such as certificates of deposit or fixed annuities).
According to New York Times financial journalist Jeff Sommer, investors are experiencing major anxiety during Donald Trump’s second presidency — and one thing that troubles them is a climate of “uncertainty” and “disruption.”
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In an article published on April 18, Sommer explains, “Uncertainty has defined financial markets this year. It’s not going away because the source of the problem is the Trump Administration. Tariffs are the main financial issue. President Trump has sometimes backpedaled when the markets have plunged. But he and other members of his administration have made it clear that higher tariffs of some sort are here, even though they are unpopular and most economists say they are a mistake. “
Sommer continues, “The risk of higher inflation and slower economic growth, along with strained relations with China and with many erstwhile allies, now appears to be a fact of life…. In fact, I think it’s time to accept that disruption is here to stay. This is causing problems for investors.”
U.S. Treasury bonds are typically considered a safe haven for investors — even during recessions. But according to Sommer, investors are even having concerns about bonds.
Sommer notes, “Another administration policy goal may be causing problems for bonds: weakening the value of the dollar to make U.S. exports more competitive and imports more expensive…. Global investors are already having second thoughts about the wisdom of holding U.S. dollars and Treasuries, and the dollar’s value has been falling.”
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The Times financial journalist adds, “As Nellie Liang, former undersecretary of the Treasury for domestic finance, put it in a piece for the Brookings Institution, some investors speculate that the cause of the furor in Treasuries comes from ‘increasing doubts about Treasury securities as the pre-eminent global safe-haven asset, consistent with the decline in the dollar.'”
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Read Jeff Sommer’s full New York Times article at this link (subscription required).
