The Markets Just Got Uglier: Here’s What To Do With Your Money Right Now
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Let's grow your portfolio one smart decision at a time. - What I really like about the Mac 7, including Apple is,

These are businesses with significant cash flow, often emote around their business. I also include Netflix in the mags of it. And mend this balance sheet so they're never going to be forced to do something they don't want to do or they don't need to do anything. So that gives me a great deal of comfort.

Hey, everybody. Thanks so much for joining us today on Her Money. So my husband is a big Bill Simmons listener. And whenever something big happens with the Celtics, Bill Simmons does an emergency pod. So this is an emergency pod. I'm Jean Chatzky. I'm not going to sugarcoat it. Things over the last few days have been

They have been pour a heavy glass of wine and look at my 401k while holding my breath and keeping one eye closed kind of bad. Trump's tariffs went to effect on Saturday and as of Sunday night, the S&P 500 had lost 15% of its value since Inauguration Day and had its worst performance since October.

the start of the pandemic. And when asked about the markets, the president said, I don't want to see anything go down, but sometimes you have to take medicine to fix something, which is not exactly the reassurance that I know any of you were looking for, which is why I have asked Karen Feinerman to join me for this

a quick 20 minutes to help us make sense of what's happening, to talk about what we should be doing or not doing right now. You all know Karen. She is on CNBC's Fast Money. She is the CEO of Metropolitan Capital Advisors. She's the co-founder and co-host of our investing club for women investing advisors.

fix. And just a quick reminder before we dive in, I'm not an investment advisor. This conversation is meant for educational purposes. So take what resonates, but always consider your own financial situation before making moves. Karen, thank you so much. I know you just got off the plane.

No, that's fine. I'm good. I'm in LA. It's fine. I'm happy to talk to you. Always, Jean, happy to talk to you about anything. But we can talk about this too. Well, we'll talk about fun things another day. Another time. So what do you make of all of this? What do I make of all of this? I think that the tariffs, as they were rolled out, were so far beyond what

Anyone that I know, including myself, expected. And so I think there was some concern with the way they were rolled out and then what the actual math of it was. And so markets hate uncertainty.

And rather than delivering any certainty on Liberation Day, I think what we got was another big dose of chaos, I think. And then over the weekend, of course, we saw China hit back. And so now are we in a spiraling tit for tat or are we going to see cooler heads prevail? So all of that makes people very nervous for sure.

as well as really a concern about what will this do to the economy. And so the thing that I sort of focus on, as you know, I'm a long-term investor, and what I focus on is where do I think we'll be at some point in the future? And that's almost always, I think it will be higher than here. And one of the things that I really look at that gives me, it's sort of a

A guiding light for me is the VIX, the volatility index, which it's really a mathematical thing that measures how much markets move within a day. But really what most people might know it as is sort of the greed and fear index. So the higher it goes, the more fear is present. And

So I follow that pretty closely. And when one's gut is telling you, this is terrifying, I want to shell everything I own, that coincides with a VIX that is very high. And to me, that is a time to step in, not out.

So, I've done nothing the last few days until today. And as you know, I'm always long. And I do have some hedges on. But still, net, net, even net of the hedges, I am always very long. So, this has obviously been a very painful period. Sure. But what I do is...

The VIX goes up and I'm just nauseated and then I cover some hedges. That's what I did today. I don't know if that's going to be right in the short term or not, but I try to follow this playbook and I can think of so many black swan kind of things that we've seen where the volatility index spikes and when I

I think about the pandemic, right? That was something we had never seen. 9-11, something we had never seen. The great financial crisis, something we had never seen. So we've seen a lot of things that we've never seen. And this is kind of the playbook I use.

You often say that the market is not the economy. And I think that is something very important to hold on to. There was a moment in trading today, more than a moment, there was a period of several hours where there was a rumor that this was all going to be unwound, that the president was going to take a 90-day pause on the tariffs.

the market rallied. I wonder if you can separate the economy, which we thought was actually fairly strong going into all of this, from the markets. Well, I think, you know, so sometimes we see euphoria in the markets that may be greater than what the underlying economy tells us. And sometimes we see fear in the markets. But the problem, though, with persistent fear is that

CEOs are people too. And if they're nervous, they are going to pull back. And so then you can get into a sort of negative, a vicious cycle of,

fear. And so holding back spending, holding back expansion plans. And then you see people don't get hired or maybe they even get fired. And then you get into that sort of vicious cycle. And so that's part of the fear of the market right now, that the economy, which had been on good footing, will now not be, as well as

Might we also have inflation with these tariffs that really, you know, the consumer pays? So both of those things, the fear of both of those things, even if they're not happening at the moment, that's enough to shake the market. Understandably so, right? My guess is...

is that we will see a big walk back in a lot of these tariffs. My soon-to-be son-in-law sent me a text this morning. I love that I have a soon-to-be son-in-law who actually wants to talk to me, which is just, like, that is amazing. You have won the lottery. I have. He sent me a text. He's like, are you buying? And my answer to him was, I'm always buying, right? I mean, I am, I think I'm...

very much the typical retirement investor. I put money into the markets in my 401k and other retirement accounts and brokerage accounts on a regular basis in a very methodical way. I buy

the investments, not all of them, but some of them that we tee up in our investing fix club, the one that sort of piqued my interest. I'm not really an individual stocks investor overall. I'm much more of a funds investor. And for me, the individual stocks are a little bit more fun. But I have felt like I'm just going to hold on

my course at this point. I checked my asset allocation. I'm lucky that I'm not carrying a lot of debt. But in a situation like this for people who are

Heading into retirement and thinking oh my goodness the typical advice is if you experience a steep downturn in the very early Years of your retirement. You should try to take a little less and

out of your portfolio. You should always try to have enough in bonds and cash that you could prevent yourself from having to sell when stocks are really down. Other than that, I think we really can't control these things. We can control our spending. Maybe we can continue to work a little longer, although I know that for some people that's not an option. Are there other things that you think about for individual investors at times like this?

So you said you're always buying, and that is my inclination too, to always be buying. But I think for some people who aren't feeling quite comfortable enough, sometimes sort of splitting the difference and buying some and keeping some in cash is the right thing to do. Because if it's just too scary... Mm-hmm.

You don't need to do all or none. You can do something in the middle. And so that's my fallback, what I hope Solomon-esque wisdom. I feel the same about taking money off the table, right? If you're feeling really scared, then selling a little rather than selling everything to enable yourself to sleep at night is, I think, a really good move. I'm wondering about...

interest rates. We've been talking about 10-year treasuries and how intent the president and the secretary of the treasury, Scott Besant, seem to be on getting the yield on the 10-year down, which has happened.

How much of all of this is about getting to a place where rates are lower? Well, I think, you know, be careful what you wish for, because if rates are lower because people are really concerned about the economy shrinking.

That, I don't think it's going to provide the help to the housing market that one hoped for, right? We need lower rates. You've talked a lot about how many people have mortgages that are so far below where we are now that those houses aren't coming to market. It's too expensive for people to leave that mortgage, right? So if you're in a recession, it's hard for people to feel comfortable buying a new home, even though maybe that might be the right thing to do when rates are down.

They're not down enough to shake out all that supply. It does allow them to sell 10-year bonds to fund the Treasury at a lower interest rate, so that is a benefit. However, the flip side of that is if the economy is shrinking, then you are likely to have less in tax revenue and potentially more in expenditures that you might need to pay out, unemployment benefits.

And so it's not a pure benefit of having the tenure be lower. We're going to take a quick break.

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We are back. We're talking with Karen Feinerman. Let's talk tech stocks for a second. A lot of 401k and other millionaires have been made, I think, on the backs of the Magnificent Seven over the past couple of years. Apple, which we added to our investing fixed portfolio back in November of 2023, has taken a big hit.

What is your feeling about the Apples, the Metas, the NVIDIAs of the world at this point? So I have a big Mag 7 allocation. So this has been a painful run, but there's a lot that I like about the Mag 7. So let's put Apple aside for just a minute because that's a little bit of its own animal. But what I really like about the Mag 7, including Apple, is...

These are businesses with significant cash flow, often emote around their business. I also include Netflix and the Mag7. And tremendous balance sheets. And that last part is really so important. Tremendous balance. So they're never going to be forced to do something they don't want to do or they don't need to do anything. So that gives me a great deal of comfort.

You know, when the market's really going up and you own companies that have a lot of debt, those are really going to take off because if their business can improve and they can start paying off the debt, then you just have more and more money going to earnings and not interest payments. And then you can see earnings really move. None of these companies. These are some of the biggest cash hordes in the history of the world.

Right? So what they can afford to do is buy back their own stock. And that's often a very good thing for them to do. We're in an odd period right now. A lot of these companies report quarterly, every fiscal quarter. So we just ended the March quarter. A lot of these companies are not able to be out in the market buying back stock. They need to wait until their earnings are released. So

What might be a time where normally you would see some buying, significant buying, by corporations of their own stock, you're not seeing it really right now. Although tonight, Broadcom did announce a buyback after the close. As you look out into the weeks and months that follow, what are the things you're going to be paying the most attention to? Well, the negative noise around this tariff rollout is

to me, the most important thing. Will we see something in short order of a new sort of spin on how they're going to do that? And I think the opportunity is there to do multiple deals with many countries. And I hope they do that.

I think that we're going to see next week, we're going to hear from JP Morgan and a number of other banks. And I care about JP Morgan. We own the stock. I've owned the stock for a long time. I love Jamie Dimon. I think that I like to see what their earnings are, but equally as important is what is their take on the consumer? What is their take on the economy? I think in his letter, which maybe came out today or yesterday, which I haven't read yet,

He is not a fan of the tariff rollout. And I think that's important to me. We started seeing this a few weeks ago, companies giving muted or sort of conservative guidance because they were very concerned about the tariffs. And so the bar for earnings has come down a little bit. But I think given how much the market's down, I mean, think about it, Gene, if you were a CEO of a retailer right now, let's say,

What would your guidance be? I mean, I think it's really hard to tell exactly where the consumer is going to land, right? Because it feels as if these policies may not actually be the same policies next week. Right, right. That could be better.

Right. That could be better. It could be worse. I mean, as a consumer, I am definitely I'm thinking more about everything that I am spending. And I'm not necessarily budget constrained or all budget constrained to some degree. But I'm not you know, I'm not counting every penny, but I am still thinking about it much more than I did before this started. And that does not bode well for all the retailers.

Right. It really doesn't. So if you're the CEO now, you're not going to get penalized. Your stock may get hit a little bit, but you're not going to get penalized for saying, you know what, we're going to be a little bit conservative here and we're going to give you sort of conservative guidance. And so what you thought maybe we would earn, we might not earn. So we're going to see that, although it's going to be a little bit noisy because you did have some pull forward.

of retailers saying, I got to buy inventory in. And maybe consumers thinking, if I want to buy a new whatever, I got to buy it now. Right, car. I mean, we just tonight, we saw from Apple, they're having a big surge in spending from people who want to buy products before the tariff hits. So we're going to see some noise. And it's going to be hard to

decipher a consumer who's confident versus what is a consumer who's trying to front run a tariff. It's hard to know. Yeah, absolutely. Well, this was great. Thank you for doing this. Of course.

I'll talk to you anytime about anything. Thank you. For all of you who are interested in the markets, we're posting this show on a Tuesday. Tomorrow, our regular episode drops. We've got an episode with Jenny Harrington talking all about dividend paying stocks. So if that's a segment of the market that you're interested in, Jenny's got a new book out. We'll talk to her

about that. And for any of you who want to learn more about investing, Karen and I would love you to join us for an Investing Fix session as we go forward with strategy and with confidence. We're meeting next week, April 14th, 8 p.m. Your first month, of course, is completely free. You can find out more about that at investingfix.com. Karen, thanks so much. All right. See you, Dean. Bye. See ya. Bye.

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