Financial experts say don’t let the events of the day dictate how you how you handle your investments.
But that is easier said than done. Just look at what happened to the stock market on Wednesday.
“U.S. stocks sold off and volatility mounted Wednesday as renewed political turmoil in Washington cast doubt on whether President Trump can push forward with a pro-growth agenda that had helped drive stocks to repeat records,” Sue Chang reported for MarketWatch.
Then there was the news about an alleged memo from former FBI director James B. Comey.
— Jim Roberts (@nycjim) May 17, 2017
The Washington Post’s Thomas Heath reported, “The stock market on Wednesday took its biggest dive since before President Trump’s election. The Dow Jones industrial average lost 368 points, or 1.8 percent to 20,611, as a broad array of other indexes all lost ground.”
Oh well, it’s been a good ride.
As Heath wrote: “Wednesday’s market turbulence comes amid near-record highs following an eight-year bull run fueled by strong earnings, especially in the technology sector. The stock market has been on a tear since the November election, helped in part by a president who endorses business-friendly policies such deregulation and tax cuts.”
There was also the report in The Post that Trump revealed secret intelligence to Russian officials.
I don’t want you to panic, but you still should be informed about how the scandals are affecting the markets. Here are some stories you should read:
— The market may be okay even without Trump in charge
Boris Schlossberg, the managing director of foreign exchange strategy for BK Asset Management, told CNBC that the “the U.S. stock market ‘already assumes’ President Donald Trump will be impeached.”
— Dow falls 300 points as Trump worries escalate: Is Wall Street finally getting ready to throw in the towel on President Trump? Perhaps.
“It’s a fairly big sell-off, but nowhere close to some of the bigger market drops that stocks experienced in the wake of the 2008 financial crisis,” wrote Paul R. La Monica for CNNMoney.
— Paul R. La Monica (@LaMonicaBuzz) May 17, 2017
Others think it’s not the scandals that will tank the market but the inability of Congress to pass tax reform amid the controversy.
“Stocks sold off in the strongest reaction yet to political controversy surrounding the Trump White House, but the market is not likely to head into a serious correction unless it appears the chaos disrupts any chance for tax reform,” wrote Patti Domm for CNBC.
For now, the best advice from experts is not to be rash. Remember investing is a long-term game. The markets go up and down. This too shall pass.
Or follow people with money: The super rich aren’t selling because of Trump
Color Money question of the week
Are you afraid the controversies around Trump will cause a slump in market? Send your comments to firstname.lastname@example.org. Please include your name, city and state. In the subject line put “Trump Scandals.”
I won’t have a live discussion today, but I’ll be back next week.
In the meantime, we had a lively chat last week with Erin Currier, director of financial security and mobility for the Pew Charitable Trusts. Currier discussed two recent reports by Pew on income volatility and financial shocks.
If you missed the conversation here’s the transcript.
Looking for Love? Having this poor financial measure can make you less attractive.
Turns out that having a great credit history makes people a good dating prospect, according to a new survey by Bankrate.com. Almost two in five U.S. adults said knowing someone’s credit score would affect their interest in dating that person. Last week I asked: How soon should dating couples share information about their credit score?
Carol Flynt from Whitmore Lake, Mich., wrote, “It’s not the credit score itself that is important. (Unless you are making a loan to the date.) The credit score is an indication of one’s relationship with money. I’ve seen marriages crumble when one is a saver and the other is a spender. I know my marriage is strong partly because we both approach money matters in the same way. It’s never the cause of argument, which I understand is unusual in marriages. That said, I think there are better ways to get the same information, all of which require time and conversation. A score reported on a dating website means nothing.”
“In my opinion, if you are not talking about marriage and building a family, then there is no need to be exchanging credit scores, 401(k) or any financial information,” wrote Meagan from Smyrna, Ga. “You can be working on correcting financial mistakes, if they are any, and developing great spending habits in your season of singleness, as I am doing. This is a season of preparation, not a season of ‘I have it all together!’ ”
Color of Money columns this week
Knowledge isn’t power. The right knowledge is power.
Stay informed about your money. Read and share my columns for this week.
Have a question about your finances? Michelle Singletary has a weekly live chat every Thursday at noon where she discusses financial dilemmas with readers. You can also write to Michelle directly by sending an email to email@example.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read more Color of Money columns, go here.