The ongoing stock market crash isn’t the first period of market turbulence that investors have experienced, but it does seem like the first unnecessary crash, according to author and entrepreneur Ramit Sethi.
"You should be f—ing pissed at what’s going on,” says the host of the Netflix series How to Get Rich on Instagram. “There is no reason for the market to drop in such a dramatic, scary way, except for Trump wanting to institute these stupid tariffs that make no sense whatsoever.”
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Sethi believes President Trump is trying to “make his mark” and exert his control over not just America’s trading partners, but also domestic corporations which may need to appease the administration to get exemptions.
But Sethi isn’t the only one criticizing the Trump administration’s economic policies. In recent weeks, Trump’s global trade wars have faced backlash from several experts, including economist Mohamed El-Erian as well as Trump’s leader of the Department of Government Efficiency (DOGE), Elon Musk.
With consumers and investors struggling to navigate these choppy economic waters, Sethi offers two key pieces of advice for the months ahead.
Don’t panic
Losing money can be a painful experience and it’s tempting to consider cutting your losses while the stock market crashes. But Sethi recommends fighting that urge.
"Times like this are where people make bad decisions with life altering ramifications" he says. "It can be very tempting for people who even think they’re disciplined investors to get scared and sell."
Trying to time the market during a rout, however, is rarely a good idea.
Hartford Funds analyzed stock market returns going back to 1995 and found that 78% of the best days on the stock market occurred either during a bear market or within two months of a bear market’s end. Selling stock and missing out on some of these “best days” could be detrimental to your portfolio’s long-term performance.
This is why the best move is to patiently wait, hold tight, or even look for buying opportunities during moments of market panic.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Build up a ‘war chest’
The ongoing stock market volatility seems to reflect investors’ concerns about the future of the American economy. In recent weeks, JP Morgan and Goldman Sachs have both raised their chances of a recession in 2025 to 60% and 45%, respectively.
To prepare for a potential recession, Sethi recommends bolstering your emergency funds.
“I’m building up a big war chest and I recommend you do the same," he says. "If you don’t have an emergency fund, you better get your a– in gear and get yourself one. That means cutting discretionary spending now before the world forces you to."
While most financial experts recommend saving three-to-six months’ of expenses in your emergency fund, Sethi says this scary economic environment justifies 12 months’ of expenses instead. “That’s the same recommendation I made during COVID,” says the 42-year-old.
A larger-than-usual emergency fund should help you prepare for not just a recession or a potential layoff, but also the added costs of essentials that are expected due to Trump’s tariffs on foreign imports.
Trump’s trade wars are expected to add $1,200 in annual costs for a typical American family, according to the Peterson Institute for International Economics. Since the study was published, the Trump administration has raised tariffs on several countries and added even more countries to the list of targets, so the actual costs could even be higher.
You can’t predict what comes next, but storing up cash and staying prepared should help you and your family stay afloat during this tough time.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
