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Yahoo
3 days ago
- Business
- Yahoo
Who's listening to Negative Nelly? Not these investors. Survey shows they're optimistic.
Americans may have gotten pretty good at tuning out negative news and predictions, at least when it comes to investing, a Wealthfront survey suggests. Individuals surveyed by investment platform Wealthfront continued investing through the April U.S. stock market volatility stemming from President Donald Trump's tariff back-and-forth, and nearly 30% say they plan to invest more in U.S. stocks in the future. That may seem counterintuitive considering the many dire forecasts for the economy and the stock market from tariff wars, but 'it's also possible that investors are getting better at handling the constant flow of headlines and uncertainties that have shaped the market lately,' said Alex Michalka, head of investment strategy at Wealthfront. In May, 55% of respondents said they were somewhat or very optimistic about the U.S. stock market over the next six months. That's significantly higher than the 42% in April who felt upbeat. The improved vibes are 'likely fueled by the postponement of tariffs and the growing perception that future trade policies could be more moderate than initially anticipated,' Michalka said. Since Trump first announced his aggressive tariff plan on April 2, some of the highest tariffs have been iced as the administration tries to strike trade deals. The latest, and arguably the most significant, talks are occurring this week in London with Chinese officials. Market volatility isn't necessarily over, and it can be uncomfortable for investors, but it's a fact of life, Michalka said. Once people understand and accept that, it's easier to stay the course and remain optimistic. 'During Covid, stocks went down really fast, but they also came back really fast,' said Nick Bour, founder and chief executive of Inspire Wealth in Brighton, Michigan. 'If you get out, you could miss the big bounce back.' Stocks ended May up 6% and are up again on the year. Additionally, if you took advantage of tax-loss harvesting and dollar-cost averaging during the volatility earlier this year, you may have even done better. Tax-loss harvesting means selling stocks that are losing money, recognizing the loss, and using it to offset capital gains, or profits made from other holdings, even if they are different types of investments or are being held in different accounts. Dollar-cost averaging is buying stock at regular intervals, regardless of whether prices are falling or rising. 'Not only did you buy investments 'at a discount,' you should have potentially valuable losses to use to lower your tax bill come tax time next year,' Michalka said. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning. This article originally appeared on USA TODAY: Optimism is rising among American investors, survey shows Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
USA Today
3 days ago
- Business
- USA Today
Who's listening to Negative Nelly? Not these investors. Survey shows they're optimistic.
Who's listening to Negative Nelly? Not these investors. Survey shows they're optimistic. Show Caption Hide Caption The trade war hits stock markets — how can you protect your finances? The global trade war has hit the stock markets — this is how you can protect your finances. Americans may have gotten pretty good at tuning out negative news and predictions, at least when it comes to investing, a Wealthfront survey suggests. Individuals surveyed by investment platform Wealthfront continued investing through the April U.S. stock market volatility stemming from President Donald Trump's tariff back-and-forth, and nearly 30% say they plan to invest more in U.S. stocks in the future. That may seem counterintuitive considering the many dire forecasts for the economy and the stock market from tariff wars, but 'it's also possible that investors are getting better at handling the constant flow of headlines and uncertainties that have shaped the market lately,' said Alex Michalka, head of investment strategy at Wealthfront. Optimism rises In May, 55% of respondents said they were somewhat or very optimistic about the U.S. stock market over the next six months. That's significantly higher than the 42% in April who felt upbeat. The improved vibes are 'likely fueled by the postponement of tariffs and the growing perception that future trade policies could be more moderate than initially anticipated,' Michalka said. Since Trump first announced his aggressive tariff plan on April 2, some of the highest tariffs have been iced as the administration tries to strike trade deals. The latest, and arguably the most significant, talks are occurring this week in London with Chinese officials. Is the worst over? Market volatility isn't necessarily over, and it can be uncomfortable for investors, but it's a fact of life, Michalka said. Once people understand and accept that, it's easier to stay the course and remain optimistic. 'During Covid, stocks went down really fast, but they also came back really fast,' said Nick Bour, founder and chief executive of Inspire Wealth in Brighton, Michigan. 'If you get out, you could miss the big bounce back.' Stocks ended May up 6% and are up again on the year. Additionally, if you took advantage of tax-loss harvesting and dollar-cost averaging during the volatility earlier this year, you may have even done better. Tax-loss harvesting means selling stocks that are losing money, recognizing the loss, and using it to offset capital gains, or profits made from other holdings, even if they are different types of investments or are being held in different accounts. Dollar-cost averaging is buying stock at regular intervals, regardless of whether prices are falling or rising. 'Not only did you buy investments 'at a discount,' you should have potentially valuable losses to use to lower your tax bill come tax time next year,' Michalka said. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
Yahoo
26-04-2025
- Business
- Yahoo
4 Moves Savvy Investors Are Making Amid Market Volatility and Tariff Rollouts
Ever since President Donald Trump announced his plans for a tariff rollout, the markets have experienced extreme volatility. If you've seen your own portfolio take a hit, you may be wondering the best course of action to take. Find Out: Read Next: 'At Wealthfront, we believe that staying the course is one of the most powerful things an investor can do,' said Alex Michalka, vice president of research at Wealthfront. 'Market volatility is inevitable, and we don't recommend investors change their strategy in response to short-term market moves. 'Reacting emotionally to short-term market movements or trying to time the market often leads to poor outcomes,' he continued. 'Instead, we encourage clients to focus on their long-term goals and what they can control — taxes, fees and diversification.' Here's what savvy investors are doing in the current economic climate. Savvy investors aren't pulling out funds due to market downswings — in fact, they're investing more. 'At Wealthfront, it's been encouraging to see our clients continue to invest through the market volatility,' Michalka said. 'Deposits into our globally diversified index fund portfolios increased by 330% on the day after tariffs were announced, and stayed elevated [the next day].' While some of this could be due to investors 'buying the dip,' Michalka does not recommend this as an investment strategy. 'We encourage regular investing rather than waiting for what seems like an attractive buying opportunity — for example, waiting for a market decline to invest,' he said. 'The general trend of markets is to go up, and if you're waiting for a 'dip' to invest, you may end up forgoing a lot of positive returns until one occurs. 'We think it's best to stick to your investing plan regardless of what the market is doing,' Michalka continued. 'That said, short-term stock market declines do offer investment opportunities because it allows you to essentially buy investments while they're 'on sale.'' Check Out: Many Wealthfront clients have been taking action to further diversify their investment portfolios, including increasing European and Chinese stock allocations. Since March 1, there has been a nearly 200% increase in clients adding the Vanguard European Stock Index Fund ETF (VGK), and from from Jan. 1 to April 3, the number of clients adding ETFs tracking Chinese stocks have increased by nearly 40%. 'Recent market volatility serves as a timely reminder of the importance of diversification,' Michalka said. 'If your portfolio is heavily concentrated in U.S. equities, adding exposure to global markets can be a smart way to build long-term resilience. 'While U.S. stocks have outperformed international markets for much of the past decade, history shows they don't always lead,' he continued. 'So far in 2025, emerging markets have outperformed the U.S. by more than 7%, and developed international markets by over 14%.' Investors are also increasing their allocations to gold, with the number of Wealthfront clients adding gold ETFs increasing by more than 25% from Jan. 1 to April 3. 'If your portfolio is heavily concentrated in equities, incorporating other assets like bonds or gold can be a smart way to reduce risk to an appropriate level,' Michalka said. Losing money in the market is never a pleasant experience, but it does provide a tax benefit. 'It's not fun to watch your portfolio temporarily decline in value when the market is volatile, but tax-loss harvesting can be a silver lining,' Michalka said. 'When the value of an investment dips below its purchase price, you can sell it at a loss and replace it with a similar investment. 'This allows you to 'harvest' the loss and maintain the overall risk and return characteristics of your portfolio. Come tax time, you can use that loss to lower your tax bill, generating a 'tax alpha' or incremental return from tax-loss harvesting.' Following the April 2 tariff announcement when the market dipped, Wealthfront traded over $4.5 billion on behalf of its clients, and helped them realize significant tax-loss harvest benefits. Its software harvested more than $100 million during this time, helping clients reduce their tax bills. In February and March, Wealthfront saw more net flows into cash than investments as investor sentiment turned negative. Keeping sufficient funds in cash is always a savvy move. 'Cash provides liquidity for short-term needs and unexpected expenses, while also serving as a stabilizer to protect the value of your portfolio, especially during market downturns,' Michalka said. 'A strong emergency fund offers peace of mind, which can be especially important when the market is volatile. 'For most people, this means setting aside enough cash to cover three to six months' worth of living expenses,' he continued. 'The ideal amount will depend on factors such as your age, profession, investable assets and the financial needs of your extended family.' Michalka recommended keeping an emergency fund in a high-yield savings account. 'This strategy allows you to earn a return on your cash while keeping the money you need for short-term purposes — or may need for an emergency — safe.' More From GOBankingRates 5 Luxury Cars That Will Have Massive Price Drops in Spring 2025 4 Things You Should Do if You Want To Retire Early 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on 4 Moves Savvy Investors Are Making Amid Market Volatility and Tariff Rollouts Sign in to access your portfolio
