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If there are any blunt reminders for investors enduring a portfolio battering right now, it’s to brace for several more years of volatility under the Trump administration.
Expect the expected, as financial services veteran Penny Pennington says.
“We’ve had a couple of pretty sanguine years and years where we didn’t see the usual two or three pullbacks of 5% to 15%. That’s a very typical thing to happen. And so, in a moment where we’ve got uncertainty from policy and tariffs and things like that, the markets are reacting. It was to be expected. And so investors are reacting,” the Edward Jones CEO told me on Yahoo Finance’s Opening Bid podcast (video above; listen in below).
“One of the things that we would be saying [to clients] is, we told you this was probably going happen at some point. We didn’t wanna believe it,” she added.
Suffice it to say that investors have been caught asleep at the wheel by Trump’s chaotic approach to tariffs and DOGE-driven government cutbacks. Their convergence has stoked recession fears this month and put stocks further into the tank in 2025.
Fresh economic data for consumer confidence from the Dallas Fed survey has painted a picture of increasingly cautious consumers and businesses. Mighty retailer Walmart (WMT) is seeing its lower-income shopper fret once again about inflation, new research reveals.
Watch: Gap CEO is monitoring tariffs every hour
And the market is moving violently to price in a potential growth slowdown.
The Dow Jones Industrial Average (^DJI), S&P 500 (^GSPC), and Nasdaq Composite (^IXIC) are down about 5% on average in March alone. Led by plunges in large-cap tech names such as Nvidia (NVDA) and Tesla (TSLA), the Nasdaq is down the most in March, with a 6% drop as investors sell off risk.
On the year, the Nasdaq is down by nearly 10%, the S&P 500 is off by 6%, and the Dow 3%.
The recent market setback is serving to reset high investor expectations, wrote Truist co-chief investment officer Keith Lerner.
In turn, investors have flocked to perceived safe-haven areas of the market in consumer staples and healthcare. European stocks also caught a bid on the view that those countries’ economic growth will outperform the US this year.
Pennington joined Edward Jones as a financial adviser just before the tech bubble burst in 2000. While she doesn’t think markets are on the cusp of a similar bubble burst, the pullback should make investors aware of the need to stay diversified.