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5 Ways To Protect Your 401(k) From the ‘Trump Volatility’
Yahoo Finance· 2026-01-20 14:26
Core Insights - The article discusses strategies to protect 401(k) investments from stock market volatility, particularly in the context of President Trump's return to office and the associated market fluctuations. Group 1: Market Volatility - Stock market turbulence has been a significant concern for investors since January 2025, particularly following the "Liberation Day" tariffs announced by President Trump, which caused a notable drop in the S&P 500 by 11% from April 2 to April 8, 2025, before it rebounded [1]. - Personal finance expert Suze Orman emphasizes that acting on panic during market declines can lead to locking in losses, making recovery difficult, as the markets have shown a quick recovery from earlier losses [2]. Group 2: Investment Strategies - Proper diversification is highlighted as a prudent strategy to protect 401(k) portfolios from market volatility, suggesting a mix of stocks and bonds to mitigate the impact of market swings [3][4]. - Rebalancing portfolios on a scheduled basis, ideally once or twice a year, is recommended to maintain desired asset allocation, although frequent rebalancing in response to volatility can lead to increased transaction costs and eroded gains [5].