It’s the start of a new tax year today and the stock markets fell sharply on Friday – the FTSE 100 was down 5% while both the S&P 500 and NASDAQ were down 6%. Markets worldwide are crashing in response to the Trump tariff changes. As usual my portfolio is not immune to the falls even if I now have a somewhat defensive portfolio which is paying high dividends. When selling gathers momentum there is nowhere to hide. Panic is gripping the market regardless of the fact that the impact of the tariff changes has yet to become clear. Uncertainty is the name of the game and it will be some months before we see the impact on company financial results. I anticipate that it will be less than the doom mongers are forecasting. It is always remarkable how companies can adapt to negative events.
What should one do in such circumstances? Well I have been through such panics before. My tactic is simply to wait for an opportune moment to pick up some cheap shares. I always have some cash in my portfolio (about 10-15% normally) and that will be deployed when the market appears to have bottomed out – but that might be some weeks or months away. I will resist the temptation to buy more shares in response to minor bounces, and I never gear up my portfolio by borrowing cash in response to anticipated bounces.
I will move cash into our ISAs to maximise my ISA holdings now we are in the new tax year with another £20,000 allowance but there is no great hurry to do that.
The moral is keep calm and carry on.
Roger Lawson (Twitter: https://x.com/RogerWLawson )
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