When retired school counselor Don Herneisen gets together weekly with his buddies for breakfast at their favourite cozy diner, they frequently discuss economic matters. As financial markets experience turbulence during the presidency of Donald Trump He revealed his newest tariffs earlier this week, so the likelihood of that subject losing traction is minimal.
"There’s political instability, there’s economic volatility, and when you’re retired, you really dislike unpredictability right now," stated Herneisen, aged 77, as he and his spouse took a break at Union Station. Kansas City , Missouri , when I visited my family on Friday.
Global stock markets plunged further downward on Friday after China responded to Trump’s significant tariff hikes in an intensifying trade conflict. These extensive new taxes, added to earlier duties and retaliatory measures globally, are anticipated to drive up costs for common goods as well.
Herneisen, residing in Lancaster, Pennsylvania, along with his spouse, Cathy Herneisen—a 74-year-old former Verizon employee—get by on a combination of their pension, Social Security benefits, and an individual retirement account, also known as an IRA. According to him, they haven't started reducing expenses yet; however, she specified that maintaining their current lifestyle still involves certain cuts.
“I'm paying more for items, yet my total expenditure remains unchanged," she explained. "I continue to adhere to my grocery budget, which implies reducing purchases of ready-made meals. Consequently, this impacts those running small businesses selling pre-prepared foods.”
They reside in a region with republican leanings within a battleground state, yet both opted not to vote for Trump. He has mentioned that Americans might experience "some discomfort" due to tariffs; however, he believes that the ultimate objectives—such as bringing more manufacturing jobs back to the United States—are worthwhile.
Chad NeSmith, who works as a portfolio manager at Tobias Financial Advisors located near Fort Lauderdale in Plantation, Florida, mentioned that they have received numerous inquiries from clients over the past few days, with the number of calls growing particularly on Friday.
“ Fear "is really gaining momentum, particularly because of the retaliatory tariff imposed by China," he stated.
Neill Smith mentioned that many of his clients were primarily seeking clarification about how they should manage their investment portfolios. "We're handling each case individually," he stated.
Neill Smith mentioned that typically, retirees tend to hold slightly lower-risk investments in their portfolios, and with bonds having performed quite well amidst market fluctuations, this strategy seems to be paying off.
"The overarching message here is that you must understand your capacity for risk and have a solid financial strategy in place before entering any situation. This will allow you to navigate through the current market fluctuations more effectively," he explained.
Colleen Power, a 57-year-old payroll specialist hailing from Kansas City, Missouri, remains optimistic that the market will bounce back before her retirement.
We have arranged everything so that survival seems likely," she stated. "Generally speaking, yes, I'm certainly concerned about the nation as a whole. However, personally, I’m not overly stressed about it right now.
However, Power, who is a Democrat, still finds the circumstances irritating. "Nothing about this is shocking on any level whatsoever, and all I can do is try my hardest at the local level and hope for the best," she stated.
Paul Brahim, an adviser with Wealth Enhancement Group in Pittsburgh, stated, "Uncertainty can be terrifying; the unknown is daunting, and individuals keep posing this question repeatedly: 'Will everything work out for me?'"
He mentioned that for someone recently retired, who has not yet begun claiming Social Security benefits and relies solely on the income generated from their investments, seeing those asset values drop significantly within mere days can be "terrifying."
However, he stated that if they have adequately prepared, there ought to be reserves available. "There should be funds set aside that we can utilize as we permit that investment strategy to recover," he mentioned.
Brahim, who leads the Financial Planning Association, an organisation representing certified financial planners, mentioned that the majority of his clientele possess well-diversified investment portfolios. Reflecting on the past year, these investments have yielded positive outcomes. "Putting things into perspective can be quite helpful when trying to alleviate fears," he remarked.
I believe it's crucial for us to step back and halt during times of uncertainty prior to making any modifications to our portfolio," he stated. "Allow the situation to stabilize.
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Stengle provided input for this report from Dallas.
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