The uncertainty of the market in the face of Donald Trump’s tariffs has concerned many Americans about the cost of everyday goods, as well as their investments.
Personal finance expert Stephen Kates says rising prices may force you to adjust your expectations on what to buy — whether it’s a new car, new kitchen appliances, or new pieces for a spring wardrobe.
“I often say that the best time to buy is when you can afford it. If you’ve been planning on buying a car, then I don’t necessarily think that this should dissuade you, but you should certainly go do your homework,” he said.
Many large companies, including Apple, rely on manufacturing overseas.
“Apple is in a position where they have pretty good margins. So, if they want to, at least for a short period of time, they can potentially eat this or they could use some of their sway to make manufacturers also eat a little bit of that. We don’t really know what those prices are going to be,” Kates said.
Empower reports the number of customers paying penalties to cash out 401k plans is on the rise. For those looking to retire, Kates’ advice is to reduce your risk.
“Having that real diversified approach and a long-term asset allocation strategy is going to underperform in really great years, but it’s going to outperform in years like this. And that’s really the important thing,” Kates said.
He says it underscores the importance of planning ahead.
“One of the best things that you can do for your finances is have a robust emergency fund. If you have a cushion of cash to protect you against life’s unknowns, then your investment portfolio shouldn’t be as big a concern for you, because you know that you don’t have to liquidate that or pull it out,” Kates said.
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