Life and Money With Helaine by Helaine Olen

Staying the Course Is Smartest Move in Uncertain Times

Hi, Helaine: I felt very edgy in the first weeks of the Trump administration. I thought about altering my investments and even considered stocking up on gold coins. But my financial adviser talked me out of it and told me to stay the course. It worked for a time.

Trump's now threatening increasing tariffs on Twitter, the stock market is down and it feels as bumpy as I feared. Should I cut back on spending and save as much as possible? Or should I stock up on cheap stuff and anything else I think I will need before the prices go up, thanks to trade wars?

Should my wife and I invest our budget reserves in paying down our home loan to get out of debt, invest abroad, or keep more money in cash to keep our reserves as liquid as possible? What do you think? -- On the Financial Edge

Dear On the Financial Edge: I agree having a president who appears to use Twitter as a governing tool can be somewhat disconcerting. But don't let it scare you into upsetting what sound like well-laid-out financial plans. The stock market goes up, and it goes down. Trying to guess at this stuff is a fool's errand. I'd stick with your current investment plan and savings and spending strategies.

As I am forever pointing out to people, the stock market can go down 20 percent, but that doesn't mean your chosen alternative won't go down even more. Similarly, I wouldn't suggest stocking up on stuff you think you might use one day because you think tariffs will make the things more expensive, unless it's something you are sure you will need to purchase within the next few months in any case. Also, it's worth noting that tariffs hardly only impact unnecessary "cheap stuff." They can also impact everything from food to cars.

As for liquid savings, three to six months emergency savings is recommended -- no matter who the president happens to be. If you don't have that, I would suggest cutting back for a time to build up an easy-to-access nest egg.

But most important: Stay calm! It's when we panic that we make the biggest financial mistakes.

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