As I am writing this, it is Monday April 7, and the stock markets opened the morning by taking a beating, but before I even finished typing this post had reversed course. I have been saying, and I still believe, that this is a major buying opportunity. I pulled all of my money out of the stock market during last year’s election because I thought the fix was in.
Trump is trying to force two things-
- He wants other countries to loosen tariffs on US goods, so American made products can be sold in other countries
- He wants to make it more cost effective for goods to be made in America
US workers are some of the most productive in the world, but thanks to government regulations like the EPA, OSHA, Obamacare, and other regulatory cost burdens, along with the crushing tariffs that American products face overseas, it is impossible for goods manufactured in America to compete. Trump is trying to change that. That change won’t happen without some blood, sweat, and tears.
That’s where the buying opportunity comes in. Buying while the market is down is the way to go. History shows that market downturns pay off. When the COVID market crash happened, we bought Royal Caribbean (RCL) at $32 a share and sold less than a year later at $112 a share- that is a 350% return.
This time around, I am buying SPY (an S&P 500 index fund), and TSLA (Tesla). We bought 50 shares of Tesla at 240. We are down for now, but I think it will rebound by the end of the year.
Keep the faith. Things in the short term will hurt a little, but you don’t lose money until you sell.
5 Comments
Christopher · April 8, 2025 at 1:08 pm
To my mind, sage advice. Thanks! If you’re going the SPY route, you might take a look at SPYI. It’s a high yield fund pulling from the S&P and paying, currently, over 12%.
Not financial advice, but it’s been working for me.
lynn · April 8, 2025 at 6:17 pm
I just bought some BRK-B. But I never sold any stock. I buy and keep forever unless I have a better investment.
https://finance.yahoo.com/quote/BRK-B/
TCK · April 8, 2025 at 6:31 pm
Out of curiosity, and speaking as someone who has never bothered with the stock market at all in his 37 years of life (but has also been thinking about buying some Tesla stocks) is there an online brokerage service you’d recommend to a complete stock market noob? Or any that you think should be actively avoided?
Divemedic · April 8, 2025 at 6:54 pm
I use etrade. If you are new to buying stocks, I would recommend that you diversify. You don’t want all of your eggs in one basket. The best way to diversify is to get shares in an index fund that buys stocks from a lot of companies, so the failure of one company doesn’t destroy your nest egg.
I buy S&P500 index funds, chiefly the one with the symbol SPY. That fund spreads its money amongst shares of the 500 largest companies in the US- the S&P500. While it has its up and down years, from March 1957 through March 2024, the S&P 500 averaged approximately 10.5% per year, with dividends reinvested. That means your money doubles about every 6.8 years. If you are 37 years old, this can be powerful stuff.
With an initial investment of $1,000 and contributing $100 a month, a 37 year old earning 9.5% per year will have $3 million at age 65. You won’t get that from any bank.
If you are interested in receiving dividends, a dividend fund is a good idea. I like the Vanguard Dividend fund VIG. When I get my dividend money, I reinvest it in either VIG or SPY.
I also think that Tesla is a good buy right now.
I put the majority of my stock money into index funds. Then, once you have a feel for buying, take 10% of your stock money and buy individual stocks. As you gain more experience, you can use more of it to buy individual stocks. Right now, I have about 70% in index funds, 20% in individual stocks, and the other 10% in paper PMs as an inflation hedge. When stocks do poorly, paper PMs tend to do well, and that is what is happening now.
I am not a financial advisor, but that is where my investment money is going right now.
TCK · April 9, 2025 at 3:47 am
Thanks for the info! I’ll have to look into this, I already knew it wasn’t going to be simple but I think I underestimated just how complicated it can get.