Worried about market turmoil under Trump? Look to the past

Majority of those who fled market during Covid-19 did worse than those who stayed in

- Tara Siegel Bernard and Ron Lieber

Nobody knows what will send the stock market into a tailspin or when that moment may be coming. This is the inherent risk that comes with investing.

But some investors are concerned that President-elect Donald Trump's policy agenda – stiff tariffs, deep federal spending cuts, mass deportations of immigrants – could push the market over the edge, inflicting real damage on the investment portfolios they worked so hard to build.

When we asked New York Times readers to send us their money-related questions after the presidential election, these market concerns ranked high. Several asked what financial advisers are suggesting that people do to protect their savings, whether they're earmarked for retirement or college tuition. Another told us she was considering selling all of her stocks in January. "Is it wise to do that?" she wondered.

The President-elect does pay attention to the stock market and seems to view its performance as a reflection of his own. Some experts say they expect the market's influence to act as a check on Trump's policy decisions.

But when there is uncertainty, we tend to focus on what we can control, and our exposure to the stock market is one of those things. Now is as good a time as any to ensure your portfolio is well positioned to weather any market conditions, regardless of who is occupying the White House.

But it may also help to consider what happened to investors when they did act on their fears during periods of market volatility.

CONSIDERING THE PAST

Assuming your mix of stock and bonds is appropriate for your personal situation and goals – which includes your ability to stomach market drops – doing nothing is usually the wisest course of (in)action. After all, we know that past results do not foretell future market behaviour, but they can inform ours.