Sharemarkets smashed: how to handle the Trump tariff volatility

The worst stock market fall since Covid is worrying investors and superannuation savers, so what should you do?

The biggest plunge in the US stock market since the 2020 Covid crash has left nervous investors and super fund members wondering what to do next.

Thursday night’s 4.8 per cent slide knocked trillions of dollars off the value of US companies, amid global recession fears sparked by Donald Trump’s tariff attack on the world. Apple alone lost $475bn of its value as its share price tumbled 9 per cent.

In response to the US carnage, Aussie shares fell more than 2 per cent on Friday, building on their 1 per cent drop on Thursday and taking their total fall since mid-February to 10 per cent.

When asked about the Wall Street meltdown, President Trump replied “I think it’s going very well … the markets are going to boom”, but most forecasters are bracing for the exact opposite.

The Trump tariffs have caused carnage on Wall Street. Picture: Michael M. Santiago/AFP

Global trade wars and recessions would spell more investment pain for Aussies with shares and super, but the last thing anyone should do today is start panic selling.

Some investment experts say now is a great time to buy because investors can pick up quality companies at 10-20 per cent discounts to what they cost a couple of months ago.

Others are saying wait and see how this plays out and be prepared to pounce, but nobody says sell everything and switch all your money to the safety of cash.

The biggest losers from the Covid collapses in March 2020, and the global financial crisis a decade earlier, were people who sold out and missed the inevitable rebound.

Shares have had a strong run in recent years, and the sell-offs simply offset some of that exuberance.

Super funds also have done well, thanks to a majority of members’ money sitting in Aussie and global shares.

Superannuation is the longest-term financial asset most of us will ever own, so stick with your strategy and remember that short-term volatility like this is the price we pay for great investment returns spanning many decades.

Originally published as Sharemarkets smashed: how to handle the Trump tariff volatility