News Direct

Author: Chris Clark

  • Will Trump’s trade war trigger a stock market meltdown? What history reveals about plunging markets and how you can not only protect your investments but leverage tariff turmoil

    Wall Street hates uncertainty. But that’s exactly what investors are wrestling with as President Donald Trump continues to send mixed messages on his aggressive tariff policies.

    Most recently, his administration announced a 90-day pause on a wide-ranging set of "reciprocal" tariffs, save for those levied on China. A baseline 10% tariff remains in place, however, as do 25% tariffs on certain categories of goods from Canada and Mexico.

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    Tariffs, essentially taxes on imports, are designed to level the trade playing field and protect domestic industries.

    But they raise costs for businesses and consumers, disrupt global supply chains and strain diplomatic relationships. All this shakes investor confidence, leading to volatility and downturns on Wall Street.

    Within two days of Trump’s global tariffs announcement, the S&P 500 tumbled 13% — well into correction territory. Economists were ramping up their recession forecasts. The markets rebounded following the 90-day-pause announcement, but uncertainty remains.

    Could his trade war tip the stock market into a full-blown meltdown? History suggests things could definitely get much worse.

    How the S&P 500 behaves in a recession

    The S&P 500 tracks 500 large U.S. companies that represent 80% of U.S. equity market value. Its performance is often synonymous with "the market," making it a core holding in 401(k)s, IRAs, and target-date funds.

    The index typically sees significant declines during economic downturns. For instance, the S&P plummeted by 49% during the tech bubble burst in the early 2000s, by 57% during the Great Recession (2007–2009), and saw a swift 34% decline during the relatively brief COVID-19 crash in 2020.

    What these historical insights suggest is that the current dip could be the tip of the iceberg. Investors could face serious financial setbacks.

    Older investors might find their retirement nest eggs shrinking at the very moment they planned to rely on them, triggering anxiety and difficult decisions.

    Panic? How to handle your investments now

    As stock markets plummet, many investors’ first instinct is to pull money out and stash it in cash or safer assets. But timing the market — trying to predict peaks and troughs — is notoriously challenging and typically backfires.

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    Instead, consider these smarter, more strategic moves:

    • Stay diversified. Spread your investments across asset classes — stocks, bonds, cash, real estate — to mitigate risks. If one sector tanks, your entire portfolio won’t go down with it.
    • Evaluate your risk tolerance. Are you losing sleep over market swings? You might be overexposed to stocks. Consider shifting to bonds or other safer, income-generating investments to provide stability.
    • Don’t stop investing. If you’re younger, a downturn can actually benefit your portfolio long-term as you can buy shares at discounted prices. Taking advantage of dollar-cost averaging as you continue to invest regularly means you’re setting yourself up for greater returns when markets rebound.

    Nearing retirement? How to protect your nest egg

    If you’re close to retirement, market turmoil feels particularly personal and understandably scary. A big market drop is devastating when you’re planning to rely on your investments soon. But panic selling can lock in losses permanently.

    Instead, take proactive steps to safeguard your retirement funds,

    • Review your allocation. Typically, as you approach retirement, your portfolio should shift toward lower-risk investments. Consider moving a larger portion into bonds, treasury securities or high-quality dividend stocks that tend to be less volatile.
    • Maintain liquidity. Keep enough cash or easily accessible funds to cover at least two years of living expenses. This approach means you won’t be forced to sell investments at unfavorable prices to meet immediate financial needs.
    • Consider professional advice. If you don’t already have a financial advisor, now might be the time. A professional can provide personalized strategies tailored specifically to your retirement goals and comfort with risk.

    Investors at every stage – whether young and growing their wealth or nearing retirement – can and should take proactive, thoughtful measures to recession-proof their portfolios.

    Ultimately, the key is balance. Don’t overreact, but don’t underestimate the potential risks.

    With strategic diversification, regular investment habits, and professional guidance, you can navigate the turbulence ahead, protecting your finances against the fallout from Trump’s tariff turmoil.

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • Economist Arthur Laffer — who was once honored by Trump — warns 25% tariffs could add nearly $5,000 to your new car’s price. Here’s how to protect your finances amid Trump’s trade wars

    Economist Arthur Laffer — one of President Trump’s most trusted advisors and a recipient of Trump’s Presidential Medal of Freedom in 2019 — has issued a stark warning to Americans: Trump’s 25% tariffs could soon drive car prices sharply upward, adding as much as $4,711 to the cost of a new vehicle.

    As American consumers prepare for sticker shock, it’s crucial to understand what’s driving this price hike and how you can safeguard your finances from the coming squeeze.

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    Laffer is renowned for his supply-side economic theories and famed "Laffer Curve," which tries to illustrate the relationship between tax rates and government tax revenue. He isn’t someone to dismiss lightly, especially considering his close relationship with Trump.

    What’s driving this surge in car prices?

    At the center of this latest economic storm is the potential elimination of an important trade exemption under the United States-Mexico-Canada Agreement (USMCA). The USMCA, implemented during Trump’s first term as president to replace NAFTA, currently allows certain trade protections that shield American consumers from steep price increases.

    The auto industry would do better if Trump kept the supply chain rules laid out in the USMCA, according to Laffer’s analysis obtained by The Associated Press. Tariff risks contradict the President’s goals of strengthening the nation’s economic stability, Laffer wrote.

    “A 25% tariff would not only shrink, or possibly eliminate, profit margins for U.S. manufacturers but also weaken their ability to compete with international rivals,” Laffer said.

    Laffer’s analysis showed if the exemption is removed, the average new vehicle price could skyrocket by an eye-watering $4,711. Even with the exemption in place, Laffer estimates car prices will still climb by about $2,765 due to the tariffs.

    Either way, American car buyers are likely to face significantly higher costs at dealerships nationwide. The stakes are high, and the economic fallout could reverberate through households already grappling with high inflation and strained budgets.

    Why are Trump’s tariffs creating so much turbulence? Vehicles assembled in America still depend heavily on imported parts — particularly from Canada and Mexico, both key partners under the USMCA framework. If these exemptions vanish, tariffs will directly inflate costs for automakers — expenses that will inevitably be passed on to consumers through higher prices.

    Adding nearly $5,000 to the average vehicle threatens affordability for many Americans. High vehicle costs could mean larger auto loans, heftier monthly payments and greater financial strain. For families needing new (or newer) vehicles for jobs and other necessities, these increases could delay important life decisions, such as homeownership, education investments or retirement savings.

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    How can you protect your finances?

    With auto prices climbing, savvy financial strategies become essential. Here’s how to navigate this challenging landscape and ensure you’re getting the best possible deal.

    Negotiate your auto loan carefully

    • Shop around for financing: Compare rates from multiple banks and credit unions before settling. Even a minor reduction in your interest rate could save thousands over the life of your loan.
    • Avoid longer loan terms: While stretching your loan might reduce monthly payments, you’ll pay significantly more interest over time. Aim for a loan term of no more than four or five years to keep your finances in check.

    Be smart about insurance

    Don’t settle for the first quote. Insurance costs vary widely among providers, so regularly compare rates to secure the most competitive deal.

    Bundling your auto insurance with home or renters insurance can also yield significant savings.

    Consider buying used

    The used car market might be your best bet if tariffs make new cars prohibitively expensive. Buying a reliable, pre-owned vehicle that’s two-to-three years old can save you substantial money, as cars depreciate most rapidly during their initial years.

    Certified pre-owned (CPO) vehicles often provide peace of mind by including warranties and thorough inspections, offering nearly the same security as buying new.

    Timing your purchase

    If you can wait out the initial tariff turmoil, consider delaying your car purchase. Prices might stabilize or even drop once the market adjusts and production methods adapt.

    Keep an eye on market trends and manufacturer incentives. Dealerships eager to clear inventory or meet sales targets might offer better deals during turbulent economic periods.

    Trump’s tariffs could push new vehicle prices to levels that challenge household budgets across America. By remaining vigilant, strategically navigating loans and insurance, and considering used or delayed purchases, you can cushion yourself against the economic shock.

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • Ray Dalio unveils an ETF based on his ‘All Weather’ strategy — typically just 30% stocks — as recession talk grows louder. Is now the time to follow in the legendary investor’s footsteps?

    Ray Dalio unveils an ETF based on his ‘All Weather’ strategy — typically just 30% stocks — as recession talk grows louder. Is now the time to follow in the legendary investor’s footsteps?

    Just as recession whispers grow louder and market uncertainty sends investors scrambling, legendary investor Ray Dalio has dropped a potential solution for the fearful seeking safety: an exchange-traded fund (ETF) based on his renowned "All Weather" portfolio strategy.

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    Launched in collaboration with State Street Global Advisors, the SPDR Bridgewater All Weather ETF (ALLW) aims to shield investors from market volatility through Dalio’s approach that typically allows for only about 30% allocation to stocks.

    With fears of an economic downturn mounting, is now the perfect moment to follow Dalio’s cautious footsteps?

    Dalio isn’t just any Wall Street investor. He’s the billionaire founder of Bridgewater Associates, one of the world’s largest and most successful hedge funds. Known for his bold insights, impressive track record and investing innovations, he has become a financial guru revered for anticipating crises with uncanny accuracy.

    The ETF website says this offering "democratizes access to an innovative take on asset allocation." Bridgewater provides a daily model portfolio to the fund manager that then makes any trades required. From its inception on March 5 to April 17, the assets under management grew to $163.51 million.

    Markets are trembling and Dalio’s timing couldn’t be more provocative.

    Decoding the All Weather strategy

    Created in 1996, Dalio’s All Weather portfolio isn’t flashy; it’s methodical and built for resilience. The approach hinges on risk management through asset diversification designed to perform well in any economic environment – boom, bust, inflation, or deflation. Specifically, Dalio suggests an allocation that looks something like this:

    • 30% stocks: Primarily for growth, but deliberately kept low to limit volatility.
    • 40% long-term bonds and 15% intermediate bonds: Providing stability and cushioning against deflation or economic downturns.
    • 7.5% gold: An inflation hedge and safe haven during crises.
    • 7.5% commodities: Diversification to guard against inflationary spikes.

    A peek inside ALLW

    The newly launched ALLW ETF appears to follow Dalio’s allocation strategy.

    As of mid-April, less than 30% its assets are in equities, namely the SPDR Portfolio S&P 500 ETF (SPLG), the SPDR Portfolio Emerging Markets ETF (SPEM) and the SPDR S&P China ETF (GXC).

    The remainder includes treasury bonds of varying maturities and gold exposure – echoing Dalio’s classic defensive stance.

    In essence, the ALLW ETF is a turnkey version of Dalio’s approach, accessible with just a few clicks rather than requiring individual investors to manage complex allocations manually.

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    Is it right for you?

    The portfolio has delivered average annual returns of 4.5% in the last decade, compared to around 10% for the S&P 500, according to PortfoliosLab, proving that playing it safe is costly during periods that see stock market exuberance.

    Dalio’s approach does have an impressive track record during crises. In his Of Dollars and Data blog, Nick Maggiulli noted the All Weather Portfolio "has more dependable real returns and less severe drawdowns than other traditional portfolios." He found it declined less than the balanced 60/40 (U.S. Stock/Bond) portfolio during the Great Financial Crisis and COVID crash. It also outperformed the S&P 500 and the 60/40 portfolio in a high inflation environment (1970s) and a low growth environment (2000s).

    It’s not a universal panacea. Investors should carefully weigh the pros and cons and speak to a financial advisor to decide whether it’s right for them. Let’s consider the advantages first:

    Risk management

    Maggiulli emphasizes the strategy’s strength, noting it provides peace of mind during market crashes. Its steady returns and lower volatility make it particularly attractive for investors nearing retirement or those with low risk tolerance.

    Stress-free investing

    The ETF simplifies investing, offering a "set-it-and-forget-it" strategy ideal for investors overwhelmed by managing multiple investments.

    Now the risks.

    Returns during bull markets

    With only around 30% or lower of equity exposure, the All Weather portfolio inevitably lags during strong market rallies. Younger investors with longer investment horizons might find this conservative approach limiting.

    Bond and inflation risk

    Given current interest rate volatility and inflation uncertainties, heavy exposure to long-term bonds could pose risks if rates rise faster or higher than anticipated.

    Lack of personalization

    Investing in an ETF removes flexibility for tailored investment decisions. Investors with specific financial goals or ethical investing preferences might find this limiting.

    Cost

    Investors should consider that the All Weather ETF has an expense ratio of 0.85%, which is much higher than the average fee for funds. The three equity index funds it contains all have much lower expense ratios.

    Should you follow Dalio’s lead?

    Dalio’s timing certainly raises eyebrows. With an uncertain economy and recession fears intensifying, his conservative, defensive stance might appeal broadly. Maggiulli captures this sentiment succinctly: “This was the key idea for Dalio and Bridgewater – find something that works no matter what the future holds."

    For cautious investors, especially those nearing retirement, embracing Dalio’s strategy through ALLW could be an intelligent move, offering stability when markets seem unpredictable. However, younger, more aggressive investors may prefer strategies emphasizing growth, even at higher risk.

    Ultimately, the decision to follow Dalio now hinges on your risk tolerance, time horizon, and faith in the market’s immediate future. But one thing’s undeniable: as storm clouds gather over the economic landscape, Dalio’s All Weather ETF may provide a safe harbor in a storm, proving once again why investors worldwide listen closely when he speaks.

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • A staggering 70% of US households can’t afford a $400K home. What this ‘critical challenge’ means for the housing market — and how you can give yourself a head start

    Buying a home has traditionally been one of the clearest markers of financial stability, but for a staggering 94 million households, even that basic milestone is slipping out of reach.

    New data reveals that an astonishing number of American households simply cannot afford the median home price, which now hovers around $400,000 in 2025 — highlighting an affordability crisis that’s gripping the nation.

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    So what does this stark statistic really say about the state of our economy, and how can potential homebuyers realistically enter an increasingly inaccessible market?

    America’s grim housing reality

    The National Association of Home Builders’ (NAHB) recent affordability pyramid analysis found 94 million households in the U.S. — roughly 70% of all households — can’t afford to purchase a home priced at $400,000. This means the majority of the population finds itself priced out of even a "typical" home.

    “As home prices increase, fewer and fewer households can afford the next price level, with the highest-priced homes — those over $2 million — having the smallest number of potential buyers,” said Na Zhao, a principal economist at NAHB. “Housing affordability remains a critical challenge for households with income at the lower end of the spectrum.”

    But let’s dive deeper: to comfortably afford a $400,000 home, a household typically needs an annual income of about $110,000, assuming a standard mortgage interest rate around 6% and a down payment of 10%.

    Even homes priced significantly lower, around the $200,000 mark, require a household income of roughly $61,000. Yet about 53 million households in America still don’t meet this modest income requirement.

    For those who want their own home, the American dream is morphing into a nightmare of perpetual renting and financial instability for tens of millions of citizens.

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    What does it say about housing affordability?

    Homeownership, traditionally the primary wealth-building vehicle for American families, is becoming an exclusive club, accessible only to higher-income households.

    Skyrocketing home prices driven by severe inventory shortages and sustained high demand have left average families scrambling to find housing they can afford. Moreover, higher mortgage rates compound the affordability challenge, adding hundreds of dollars to monthly payments.

    This situation perpetuates cycles of economic inequality: the wealthy gain equity and stability, while others struggle with escalating rent and financial insecurity.

    With millions unable to achieve homeownership, long-term financial stability becomes a distant dream, undermining retirement savings, wealth accumulation and generational financial security.

    Three practical steps to breaking into the housing market

    Despite these grim statistics, buying a home isn’t impossible — it just requires discipline, strategy and realistic expectations. Here are three steps potential homebuyers can take today.

    Master your budget

    Step one to homeownership begins with a disciplined budget. Know exactly where every dollar goes each month. Reducing unnecessary spending frees up money you can redirect toward savings. Track spending, cut subscriptions you rarely use and eliminate impulse buys. Even small savings can significantly impact your financial readiness over time.

    Calculate your down payment wisely

    A common misconception is that buyers need a hefty 20% down payment. While this amount helps avoid private mortgage insurance (PMI), it isn’t a necessity. Federal Housing Administration (FHA) loans allow for down payments as low as 3.5%, and conventional mortgages can be secured with as little as 5%.

    Determine how much home you can afford, calculate your down payment and start setting aside those funds diligently. Remember, lower down payments will increase your monthly costs slightly due to PMI, but getting into the market sooner might outweigh the extra expense.

    Understand local market costs

    National averages don’t always tell the whole story, as prices vary widely by location. Research and understand your local housing market dynamics. Online platforms and local realtors can help gauge the realistic cost of homes in your desired area. Knowing local prices helps set achievable targets for saving and borrowing.

    Moreover, consider locations slightly outside major metropolitan areas. Suburbs and smaller towns often provide more affordable options, allowing you to gain equity and financial footing, even if it means a longer commute or lifestyle adjustments.

    The housing affordability crisis won’t vanish overnight. Addressing this issue demands collective effort — from policy changes that boost affordable housing development to individual financial literacy improvements. By taking practical and informed steps, would-be buyers can reclaim a piece of the American dream, despite the odds.

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • Donald Trump’s new housing chief launches major shakeup at Fannie Mae and Freddie Mac — here’s what it could mean for your mortgage

    Donald Trump’s new housing chief launches major shakeup at Fannie Mae and Freddie Mac — here’s what it could mean for your mortgage

    President Donald Trump‘s newly appointed housing chief has made waves by launching a dramatic shakeup at mortgage giants Fannie Mae and Freddie Mac, potentially reshaping America’s mortgage market.

    William Pulte, a private equity executive whose family founded one of the country’s largest homebuilding companies, took charge of the Federal Housing Finance Agency (FHFA) on March 13. The regulator is responsible for overseeing both Fannie Mae and Freddie Mac. Pulte wasted no time in executing a dramatic purge of leadership at both mortgage giants.

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    According to multiple reports, a number of board members across Fannie Mae and Freddie Mac were swiftly replaced, with Pulte installing himself as chairman of both entities. Freddie Mac’s CEO Diana Reid, a long-serving executive, was also removed — sending a clear message about the scope and seriousness of this transformation.

    So, what do these abrupt changes signal for the housing market and the mortgages of millions of American homeowners?

    Privatization speculation

    Pulte’s bold moves have ignited speculation the Trump administration is pushing to privatize Fannie Mae and Freddie Mac. Both are government-sponsored entities (GSEs) and have been under federal conservatorship since the 2008 financial crisis in which they were bailed out. Together, the companies back 70% of the mortgage market, according to The New York Times. Skeptics believe privatization would make buying a home more expensive in the midst of a housing affordability crisis.

    “It would mean that mortgage rates would increase — definitely,” Laurie Goodman, founder of the Housing Finance Policy Center at the Urban Institute, a think tank in Washington, D.C., said to the news publication.

    Meanwhile, privatization could be a boon for both investors and the federal government. Depending on the structure of the deal, privatizing could generate billions of dollars in revenue for an administration that’s focused on cutting down wasteful spending across the board. Placing these companies in private hands would also free the government from potential future bailout obligations.

    For his part, Pulte has struck a measured tone publicly. He told CNN that “it’s critical to ensure any discussion about exiting conservatorship needs not only to ensure safety and soundness but how it would affect mortgage rates.”

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    Impact on the housing market

    Why do critics think privatizing these entities would increase borrowing rates? Fannie Mae and Freddie Mac don’t directly issue mortgages — rather they buy mortgages from lenders and package them for investors as securities. This maintains cash flow within the mortgage industry, allowing lenders to offer stable, affordable rates, experts say.

    But if the federal government no longer backs these entities, their safety net goes with it.

    “When the government is backing an entity’s products and services, it helps to reduce risk, especially in the generating of loans,” Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “Removing it opens the door to higher interest rates for those looking to buy or refinance. It could also lead to more restrictive policies in even getting a loan, as lenders react more cautiously to some buyers.”

    Increased rates could affect affordability, particularly for first-time buyers or those with modest incomes already stretched thin by soaring home prices.

    As for homeowners with existing mortgages may also be affected if they ever want to refinance their loan. It may be less likely you can reduce your monthly payments if you’re struggling to get by.

    The long-term impact of this housing shakeup remain uncertain, however, homebuyers and homeowners could serve themselves well by staying informed so they can navigate potential changes effectively.

    What to read next

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • ‘What we’re doing is very big’: Trump has said he won’t rule out a recession — here are 3 simple strategies to help keep your finances safe in a downturn

    ‘What we’re doing is very big’: Trump has said he won’t rule out a recession — here are 3 simple strategies to help keep your finances safe in a downturn

    Sometimes what leaders don’t say speaks the loudest. So, when U.S. President Donald Trump refused to rule out a recession amid a wave of price-increasing tariffs and stubborn inflation, it sent a clear message: economic pain might be part of the plan whether America wants it or not.

    When Trump sat for an interview with Fox News in March and refused to rule out a recession, his answer — coupled with his Cabinet’s insistence that short-term pain could be worth it in the long run — has sparked fresh anxiety among consumers and economists already bracing for impact.

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    “I hate to predict things like that,” Trump said when asked by Fox host Maria Bartiromo about a recession in a March interview. “There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing … it takes a little time, but I think it should be great for us."

    Cabinet members have echoed their boss, arguing that short-term economic pain caused by tariffs on international imports and slashing federal spending would create long-term gains.

    That framing has hit a nerve. After all, recessions are more than abstract economic concepts: They mean job losses, tightened budgets and financial stress for millions. Here’s how to protect yourself.

    Below the surface of Trump’s words

    The backdrop to these remarks is crucial. Persistent inflation has consumers facing price hikes at grocery stores and retail shops, and housing affordability remains a challenge. Trump and his team argue that aggressive fiscal changes — including cutting federal programs and taking a hard line on trade via tariffs — are necessary corrections.

    Suggestions of short-term collateral damage have unnerved many economists, who worry that Trump’s tariffs will elevate inflation, stunt growth and increase recession risks. Goldman Sachs has raised its recession probability to 45%, citing tariffs as a significant factor.

    Deep cuts to government spending is already reducing economic activity and has cost tens of thousands of federal workers their jobs. Broad tariffs are expected to significantly increase the prices of imported goods on everything from electronics to cars, hitting consumers and businesses alike.

    Still, regardless of whether Trump’s policies result in a recession, proactively recession-proofing your finances is prudent. Here are three straightforward strategies to fortify your financial health against an extended downturn.

    Diversify your investments — smartly

    If recession fears become reality, diversified investments can shield your savings from significant losses. Rather than placing all your financial eggs into one basket, consider spreading your assets across multiple investment types:

    Dividend-paying stocks: Companies that reliably pay dividends — especially in stable sectors like health care, consumer staples and utilities — typically perform better during economic downturns.

    Bonds: Treasury and investment-grade corporate bonds offer steady returns and reduced volatility compared to stocks, providing crucial financial stability during turbulent times.

    Real estate: Historically, real estate investments — especially rental properties — often weather recessions well, providing both appreciation potential and steady rental income.

    The key here is not just diversification, but intentional diversification toward assets known for resilience in uncertain economic climates. You may want to consult with a financial advisor to calibrate your portfolio to your risk tolerance and financial goals.

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    Trim non-essential spending and build savings

    In booming economies, it’s easy to overlook how quickly unnecessary expenses add up. When recession risks loom, now is the time to ruthlessly assess your spending habits:

    Audit your budget: Go line by line and identify subscriptions, services or discretionary purchases you can either downgrade or eliminate entirely.

    Boost emergency savings: Aim to build a safety net of three to six months’ living expenses. Cash reserves offer a vital buffer, keeping you afloat if your income is reduced or interrupted during a recession.

    By proactively cutting non-essential spending, you create flexibility in your monthly budget, positioning yourself to weather economic shocks with greater confidence.

    Prioritize paying down high-interest debt

    High-interest debt can become crushing when economic conditions tighten. As borrowing rates spike during a recession, carrying significant debt can rapidly spiral out of control. Therefore, prioritizing debt repayment now is a critical protective step:

    Target credit card balances first: These typically carry the highest interest rates, draining significant portions of your income. Implement strategies like the “avalanche method,” paying down debts starting with the highest interest rates.

    Refinance wisely: If possible, consider refinancing high-interest loans into lower-interest options, reducing your monthly payments and overall debt burden. But act quickly — refinancing becomes harder and less favorable as recessions take hold.

    Proactively attacking debt not only saves significant money in interest payments but also boosts your financial resilience, giving you greater flexibility if economic hardship strikes.

    What to read next

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • ‘I could be dead in a year or two’: Social Security asks California man with HIV to repay $201K in disability benefits — here’s what to do if Social Security slashes your benefits

    ‘I could be dead in a year or two’: Social Security asks California man with HIV to repay $201K in disability benefits — here’s what to do if Social Security slashes your benefits

    Government spending and jobs are being cut across the board, and it doesn’t seem like there isn’t an agency left untouched — including Social Security.

    This became all too real, and frightening, for Paul Aguilar, who recently got a letter from the agency telling him his disability benefits had been slashed. Even worse? The agency claims it overpaid Aguilar $201,000, and it wants the money back.

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    The letter said that “there were concerns about my benefits and that they should have actually stopped December 2013, and that I now owed them over $200,000 and I had 30 days to pay that $200,000," Aguilar told ABC7 News.

    Aguilar has been unable to work and on disability due to his HIV-positive status since 2005. Now, Social Security wants him to pay back a decade’s worth of benefits in just one month.

    While the sheer size of the bill is scary enough, Aguilar said he’s most worried about his medical care getting cut off and giving the disease a chance to catch up.

    “The fact that they cut off my medical care scares me more than anything else because if I can’t access my medical care, it means I can’t access my medications which means eventually my HIV virus disease will spiral out of control and I could be dead in a year or two.”

    Aguilar believes DOGE is behind his benefits being slashed, and he might be right: the Social Security Administration released a statement in February about its plans for structural reorganization in response to DOGE cuts and changes from the Trump administration. Even before DOGE, the agency has come under scrutiny for overpayments that were later flagged for repayment, stunning and scaring benefit recipients.

    But that isn’t stopping Aguilar from fighting back. He’s been working with a lawyer, his doctor and is reaching out to lawmakers.

    What you can do

    As the Elon Musk-led DOGE targets federal government agencies for drastic cuts, it’s fair to wonder if and when disability benefits might be cut. But there are measures you can take if it happens to you.

    If you want to file an appeal, do it immediately. In order to keep your benefits during the appeal process, you need to make that request within 10 days of notice. You then have 60 days to file an official appeal.

    Consulting a disability attorney as soon as possible is the smartest route to take. An attorney can walk you through the appeals process and go to any benefits hearings if necessary. Even better, many disability lawyers handling Social Security cases work on contingency, which means you only pay them if they get your benefits reinstated.

    Make sure to gather all relevant documentation related to your disability, including medical records, physician statements, treatment and therapy records, and any correspondence with the Social Security Administration. Be sure to also include any evidence that your disability prohibits you from daily tasks or working.

    In the meantime, you might need to explore other coverage options. Even if your SSDI benefits are cut, Medicare coverage may be available.

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    Preparing for the uncertain

    The current economic and political landscape might have folks feeling anxious about the availability of benefits and services. Social Security has appeared acutely at risk, as cuts have already hurt staffing levels and closed offices.

    Let’s explore some ways you can prepare yourself for possible cuts.

    Set up an emergency fund: Consider opening a high-yield savings account for small but consistent auto-transfers. Aim for an amount that will cover three to six months of essential expenses.

    Analyze your budget: Track your non-essential expenses to see what could be removed quickly in the event of a sudden cut to your benefits. Formulate a hypothetical budget that only focuses on essential bills, especially medication, treatments or transportation related to your disability.

    Consider flexible work options: If your disability prevents you from working 40 hours, consider part-time, remote or freelance work — anything to build up that emergency fund. Make sure to research what work limits SSDI has in place, as working could impact your benefits eligibility.

    Explore other resources: Research your eligibility for other benefits services, such as SNAP, Medicare, utility discounts, housing assistance and nonprofits. If your disability benefits get cut suddenly, you’ll know which services to turn to quickly. Also consider checking out the Disability Benefits Consortium, a national group of charities that provide resources, advocacy and guidance in the benefits system.

    Keep track of your benefits: Benefits policies are rapidly changing, with criteria for assistance getting tightened. Make sure to stay alert and up-to-date with current SSA policy and respond promptly to any correspondence from the agency. This will help keep you informed and prepared in the event you need to appeal a cut to your benefits.

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • I invest in my 401(k) every month without fail — but I’m starting to get really worried about a recession. Would it be a mistake to start hoarding my cash instead?

    I invest in my 401(k) every month without fail — but I’m starting to get really worried about a recession. Would it be a mistake to start hoarding my cash instead?

    The economy is top of mind for just about everyone right now — and if you’re bracing for a possible recession, you’re far from alone. Economists are raising their forecasts, saying there’s a nearly 50% chance of the U.S. entering a recession in 2025.

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    If you or your spouse lose your jobs, you’ll could be in for a financial shock.

    It sounds like you’re thinking about beefing up your emergency fund fast and hitting pause on your 401(k) contributions. So, what’s the smart move?

    Emergency savings and 401(k)

    Both an emergency fund and a 401(k) are essential parts of a strong financial plan. One secures your future, the other protects your present.

    Your first priority should be building a big enough emergency fund. It’s your financial parachute when life throws you a curveball: a job loss, a medical bill or a major home repair. Without it, you might be forced to lean on credit cards or payday loans to stay afloat.

    Most experts recommend saving at least 3-6 months’ worth of essential expenses in a liquid, high-yield savings account. That way, the money’s there when you need it, without penalties or delays.

    Once you have this cushion and you’ve paid off any expensive debt, you can turn your focus to investing. Your 401(k) is a powerful tool for long-term wealth, especially when you factor in tax advantages and employer matching. Experts recommend putting at least 15% of your pretax income, including employer contributions, toward retirement every year.

    Stopping contributions at any age can be costly but especially if you have a long investment horizon. Say you start contributing $6,000 a year at age 30 and retire at 67. With a 7% annual return, you’re looking at nearly $1.1 million before any employer contributions. Add those in, and you would be looking at a very healthy retirement nest egg.

    Contributing during downturns as well lets you buy low and potentially reap bigger rewards when the market rebounds. And if you stop entirely, you also lose out on any employer match — which is essentially free money left on the table.

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    How to find a balance and supersize your emergency fund

    You may decide that your income during a recession will be irregular, and a 3-6 months emergency fund won’t cut it. Maybe you’re in a stable industry like health care, but your spouse works in real estate — a sector that can wobble when the economy dips.

    Personal finance guru Ramit Sethi recently recommended people build a 12-month emergency fund he calls a “war chest.” But he didn’t say you should stop investing to do it.

    “That means cutting discretionary spending now, before the world forces you to,” he said in an Instagram video. Before you cut into retirement contributions, look for easier budget wins: Cancel unused streaming services, rein in food delivery, or hit pause on nonessential subscriptions.

    Speak to a financial advisor about the best approach for you, but here’s a simple strategy you can consider adopting: Once you build a 3-6 months emergency fund, keep contributing enough to your 401(k) to capture your employer’s full match. That’s your bare minimum. Anything beyond that? Consider redirecting it toward emergency savings, at least until you hit your goal.

    Once your emergency fund is big enough to help you sleep better at night, ramp those 401(k) contributions back up. Because the best financial plans don’t sacrifice long-term security for short-term panic — they find a way to support both.

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • This 32-year-old Pilates instructor was convicted of ‘lies’ that duped JPMorgan out of $175M — and some now compare her to Elizabeth Holmes. How she did it and what investors can learn

    This 32-year-old Pilates instructor was convicted of ‘lies’ that duped JPMorgan out of $175M — and some now compare her to Elizabeth Holmes. How she did it and what investors can learn

    Charlie Javice was the young, charismatic founder behind Frank, a fintech startup that promised to revolutionize the then-daunting student financial aid process.

    Javice’s bold vision to simplify the Free Application for Federal Student Aid (FAFSA) gained recognition, landing her on Forbes’ prestigious "30 Under 30" list. More media attention — and investor interest — weren’t far behind.

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    Enter banking giant JPMorgan Chase, which hoped to leverage Frank’s alleged massive user base of more than 4 million students to gain a stronger foothold in the lucrative student finance market.

    The bank’s decision to pay $175 million appeared justified given the growth and scale touted by Javice.

    But beneath Javice’s business model, prosecutors alleged, were fake user accounts and falsified data. Undetected during JPMorgan’s due diligence process, the strategy eventually unraveled into one of Wall Street’s most dramatic fraud scandals, drawing parallels to the fraud case of disgraced Theranos leader Elizabeth Holmes.

    In late March federal jurors convicted Javice of fraud and conspiracy, setting the stage for possible decades-long prison sentences for Javice and her co-defendant, Olivier Amar.

    At a recent bail hearing, Javice’s lawyer attempted to argue that wearing an ankle monitor would prevent Javice from doing her current job: teaching Pilates in South Florida.

    How exactly did Javice manage to deceive a financial powerhouse like JPMorgan? And what crucial lessons can investors take from the company’s mistakes?

    Who Is Charlie Javice and what did she promise?

    Charlie Javice founded Frank in 2016, promoting it as a cutting-edge platform that would simplify the process of applying for federal student aid.

    By digitizing and streamlining FAFSA, Frank promised students easier access to financial support, dramatically reducing paperwork and bureaucratic hurdles. Javice projected confidence, ambition, and youthful innovation, quickly positioning Frank as an indispensable tool for college-bound students nationwide.

    By 2019, Javice had been widely celebrated for her entrepreneurship and ability to attract venture capital. Her portrayal of Frank as a major success story, boasting millions of active users, secured her credibility in financial circles.

    In reality, Frank’s actual customer base was less than 10% less than the company had publicly boasted of.

    When JPMorgan expressed interest in acquiring Frank, Javice sensed an opportunity to capitalize on the bank’s appetite for growth. She reportedly paid a data scientist $18,000 to generate millions of fake user profiles, complete with realistic personal information, to substantiate her exaggerated user claims.

    Testimony revealed JPMorgan officials never checked if the users were real.

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    How JPMorgan fell victim to Javice’s deception

    Jamie Dimon, JPMorgan’s longtime CEO, would later call the acquisition of Javice’s company a "huge mistake."

    So how did a banking titan fail to uncover such blatant fraud during its acquisition process? JPMorgan appeared to rely heavily on data presented by Javice and her team, failing to independently corroborate the legitimacy of Frank’s purported user base through external audits or third-party verification.

    The deception only came to light when JPMorgan attempted to leverage Frank’s user base, eventually learning after a subsequent internal investigation that the bank had been manipulated.

    In December 2022, JPMorgan took legal action, filing a lawsuit against Javice for defrauding the company. The U.S. Department of Justice soon followed, charging Javice with wire fraud, bank fraud, securities fraud, and conspiracy.

    “It was through their lies that (Javice and Amar) became multimillionaires,” federal prosecutor Rushmi Bhaskaran said during the trial.

    Javice’s defense attorney, Jose Baez, claimed JPMorgan was fully aware of the accurate user figures, suggesting the bank had simply experienced buyer’s remorse due to subsequent regulatory changes affecting the fintech sector.

    But the jury was unconvinced, leading to Javice’s guilty verdict on all counts, and she now faces up to 30 years in prison.

    Lessons learned: Protecting your investments

    Javice’s elaborate fraud highlights essential lessons for all investors, from major financial institutions to individual retail investors. Protecting funds against similar scams requires diligent skepticism, rigorous verification and proactive risk management.

    Investors must prioritize independent verification of any data provided during acquisitions or funding rounds. Relying solely on company-provided information is insufficient; third-party audits, external validations and comprehensive cross-checking of user data are essential. Understanding the nuances of a company’s business model, revenue streams, and customer acquisition methods can help reveal underlying red flags.

    Investors should also be wary of hype-driven valuations and high-profile media endorsements. Accolades, like those Javice received from Forbes (though the publication later put Javice in its “Hall of Shame”), can create a false sense of security. Instead, rigorous analysis of financial fundamentals and operational transparency should guide investment decisions.

    Regulatory tools, such as the SEC’s EDGAR database and FINRA’s BrokerCheck, offer valuable insights into corporate transparency and leadership backgrounds. Engaging trusted financial and legal advisors also adds necessary layers of due diligence and can help investors avoid costly oversights.

    What to read next

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • ‘Any reduction in federal Medicaid spending would leave states with tough choices’: Musk’s taking the chainsaw to federal budget has experts sounding the alarm

    ‘Any reduction in federal Medicaid spending would leave states with tough choices’: Musk’s taking the chainsaw to federal budget has experts sounding the alarm

    Musician Cat Stevens (Yusuf) once ruefully sang that the first cut is the deepest, which explains why many Americans are bracing themselves for the fallout of Elon Musk and the Department of Government Efficiency’s (DOGE) cutting of the federal budget.

    The world’s richest man wants to cut $1 trillion from the federal budget. In a recent Fox News interview, Musk declared that the cuts wouldn’t harm essential U.S. services, promising Americans they could have their fiscal cake and eat it, too.

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    “The government is not efficient,” Musk said. “There’s a lot of waste and fraud. So, we feel confident that a 15 percent reduction can be done without affecting any of the critical government services.”

    But as analysts and concerned citizens point out the numbers — and reality — might not add up to Musk’s optimism.

    Millions of Americans depend on essential services like health care and retirement support, so the coming months may prove critical in determining whether Musk’s actions will deliver prosperity or deepen economic woes.

    What does $1 trillion in cuts really mean?

    What’s pinching the chain in Musk’s cuts is President Donald Trump’s recent round of tariffs.

    The broad-sweeping tariffs, which have been temporarily placed on pause, have driven a wedge between his administration and the Tesla billionaire. Since Inauguration Day, DOGE has spearheaded layoffs across all departments of the federal government, leading to concerns that Musk is moving too fast and endangering services counted on by millions of Americans.

    DOGE, and its cuts, have yet to be approved by Congress. But Musk and his team argue that federal spending has ballooned irresponsibly, claiming wasteful expenditures can easily absorb these cuts without hurting Americans’ daily lives. Recent events, however, suggest the reality might be more complicated.

    Cuts made by DOGE are impacting older adults particularly hard. Social Security offices, a vital resource for retirees managing their benefits, have seen significant staffing cuts, causing online systems to buckle and physical locations to become overwhelmed. Older Americans — many unfamiliar with digital platforms — now face hurdles to support. Retirees have flooded social media and news outlets venting their frustrations, suggesting Musk’s self-described “revolution” feels more like abandonment.

    The cuts have also injected unpredictability into the stock market. Experts suggest Wall Street, already in turmoil over tariffs, might be underestimating the impact of the DOGE cuts, which could reduce consumer confidence.

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    What if Medicare and Medicaid are on the chopping block?

    Beyond these immediate impacts lies a deeper concern: Experts warn the math behind Musk’s $1 trillion cuts doesn’t add up without significantly scaling back Medicare and Medicaid. They represent nearly a quarter of the federal budget.

    If cuts are made to Medicare and Medicaid, millions could find their health coverage compromised or significantly reduced.

    Currently, Medicare serves approximately 67 million Americans. Medicaid provides essential healthcare to roughly 72 million low-income individuals, including children, older adults in nursing homes and disabled Americans. Any substantial reduction in these programs would inevitably ripple across communities, straining hospitals and leaving countless families struggling to afford basic medical care.

    Health policy experts have sounded the alarm for those reasons. According to a recent Kaiser Family Foundation report, cutting even a small percentage of Medicare or Medicaid could lead to thousands of healthcare facility closures, disproportionately affecting rural and underserved urban areas.

    “Any reduction in federal Medicaid spending would leave states with tough choices about how to offset reductions through tax increases or cuts to other programs, like education,” Kaiser Family Foundation analysts concluded in a recent Medicaid brief studying the impacts of proposed Medicaid cuts. “If states are not able to offset the loss of federal funds with new taxes or reductions in other state spending, states would have to make cuts to their Medicaid programs.”

    Public reaction

    Public skepticism (and incredulity) underscore a fundamental tension between Musk’s economic vision and the gritty realities facing everyday Americans.

    Economists widely acknowledge the need for fiscal responsibility and targeted spending cuts. However, Musk’s trillion-dollar gamble highlights crucial trade-offs between government size and service quality, forcing hard conversations about national priorities. As debates rage and details emerge, citizens must remain informed and engaged, understanding exactly what’s at stake.

    What to read next

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.