By Josh Katzowitz, WCI Content Director
Every time a bull market enters a correction period or, even worse, becomes a bear market and white coat investors lose tens of thousands, hundreds of thousands, or millions of dollars in a short amount of time, the question inevitably appears:
“Is this time different?”
We know that the stock market has always gone up and to the right over time.
If you need proof, here's a good illustration of how time in the market has always worked to your advantage.
If you stay in the market long enough, history tells us that we WILL make money even though we'll probably also have to go through some deep dives. That’s why Dr. Jim Dahle is always preaching about staying the course, why other investors speak about buying the dip, why WCI columnist Rikki Racela writes about his lust for buying stocks on sale, and why Warren Buffett proclaims that you should be greedy when other people are fearful. A down market is a ripe market to make money.
All of that is good advice. But when the dot.com bubble burst or the Great Recession began or when the Coronabear era made investors’ lives extra difficult, the question always came: Is this time different?
The last 12 days have been chaotic. After President Trump raised tariffs across the globe during his so-called Liberation Day on April 2, the markets have mostly plunged into a downward spiral. In the two days following Trump’s announcement, the market suffered its biggest two-day decline in the past 70 years, and more than $6 trillion was almost instantly erased. While there was a bit of relief a few days ago (when most tariffs were paused for 90 days) and the market had one of its biggest one-day jumps in history, the rest of the week mostly brought more pain. On April 1, the Dow Jones stood at 40,225; at the end of April 11, it was at 40,212.
If you’ve recently looked at your 401(k) or your taxable brokerage account, you probably felt a wave of nausea. Across internet forums and comment sections, the same question is bubbling to the surface once again: Is this time different?
The best answer I can give is sort of but probably not. Now, in an effort to help squash feelings of panic-selling and to step out of whatever political bubbles are telling us that this market downturn is a stroke of genius or a stroke of madness, let’s turn to the financial experts we trust to see what they’ve said recently about what to do—and about whether this time is somehow unique in history.
Is This Time Different?
Here’s what Suze Orman wrote on Facebook on April 4:
“I know many of you are afraid of what's happening in the economy and the stock market. So here's my take: We are looking at another down day for the markets today. Why? Well, China has retaliated, and that's got investors on edge. The markets are projected to go lower as a result.
Now, I know many of you are dollar-cost averaging—and that’s still OK—but please hear me on this: if you're going to continue that strategy right now, do it with seriously tiny amounts. This is not the time to be aggressive.
We're seeing signs that feel a lot like 2022. Volatile. Emotional. Uncertain. And yet . . . I want you to breathe. Markets will eventually recover. But not all at once. If these tariffs stay in place, it will take time. So remember: money you have in the market should have been money you did not need for at least five years. Let this play out.
If you are contributing to a retirement account, do not stop. Stay the course. Keep investing steadily. That consistency is your power.”
Here’s what Mike Piper wrote on The Oblivious Investor on April 7:
“If you’re thinking, ‘This time is different!’ yes, you’re right. This time is always different. That’s the key thing to understand.
In early 2020, we saw an extremely quick decline, coupled with a pandemic. That was certainly a new and scary experience. In 2008-2009, we saw a quick and large decline, coupled with major financial institutions collapsing and a non-trivial possibility of the whole thing becoming system-wide if too many large institutions failed. That was a new and scary experience. In 2000-2002, we saw a large decline that just kept on going and was coupled with things like major accounting fraud scandals. Could we trust that the market wasn’t just a scam, rigged against the little guy? It was a new and scary experience.
That’s how these things go. A significant market decline doesn’t happen out of thin air. Such declines are generally accompanied by some scary real-world event.
If you’re going to invest in the stock market, you have to be prepared to see large declines from time to time, coupled with something scary going on.”
Here’s what Warren Buffett wrote in February in his annual Berkshire Hathaway shareholders’ letter. He’s obviously not addressing what’s happened this month, but it’s still instructive. Remember, Buffett raised eyebrows at the end of 2024 by amassing $334 billion in cash—observers opined at the time that he was worried about the Trump presidency and wanted a safety net or that he wanted all that cash so he could dump more of it into the market when the downturn came.
“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote to his shareholders. “That preference won’t change.”
This is what JL Collins wrote in November 2024, soon after Trump was elected to his second term. Kudos to him for invoking a little Greek mythology in his analysis.
“. . . To me, it feels like we could see a significant bear market sometime down the road. Love him or loathe him, Mr. Trump is a disruptive force and Mr. Market hates disruption. Plus, one is due. We are at the pinnacle of a massive 15.5-year bull market and such runs don’t last forever.
So, time to move to cash?
Not for me. My discipline remains the same. No one can predict Mr. Market, least of all me. I will remain fully invested.
Should my bearish speculation prove correct, I will have tied myself to the mast and will stay invested, and investing, as it rages and passes.
Should the Mr. Market continue this historic bull run, I’ll be right there with it.
This is The Simple Path to Wealth.”
Ramit Sethi wrote the following in his email newsletter on April 8:
“I’m not selling. This is the moment when even disciplined investors screw up. I’ve been seeing it all over Reddit and Twitter. People who’ve been screaming ‘buy and hold' for years suddenly panic and sell everything after a few bad days. It might feel logical in the moment, but it’s almost always a devastating long-term decision.
If you’re investing for the long term—and you should be—then you don’t need to panic. I’m not selling a thing. My portfolio is built for the long game, so I’m not touching it for another 10, 20, 30 years.”
As for what Jim Dahle thought during the Coronabear drop, here’s what he had to say in 2020:
“I've come to discover that it really doesn't matter what I write in advance. I've been writing about bear markets; about behavioral finances; about why you need a financial plan and how to write one; about the importance of staying the course; about why it is smart not to try to time the market, pick individual stocks, or use actively managed mutual funds; about how to keep finances in their proper place in your life; and how to earn, save, invest, spend, and give well.
But one big market downturn and it's like it's a brand new blog that nobody has ever read before. The WCI Forum is somehow now full of market timers. The WCI Facebook Group is somehow now full of stock pickers. The Bogleheads forum is convinced that this time it's different . . . Guess what, guys? I'm still here. The message is still the same:
- Earn as much as you can while maintaining balance in your life
- Save at least 20% of your gross earnings for retirement
- Invest it into a fixed asset allocation, diversified between stocks, bonds, +/- real estate
- Keep your costs low
- Don't try to time the market
- Use low-cost, broadly diversified index funds
- Use tax-protected, asset-protected investing accounts as much as possible
- Develop and follow a written investing plan
- Keep a long-term perspective
- Get good advice at a fair price
- Rebalance, tax-loss harvest, and donate appreciated shares to charity in lieu of cash.”
So, is this time different? Yes, each market drop is always different. Maybe the question should be: should you do anything different? The answer, at this point, is still no. Lash yourself to the mast and plug your ears with beeswax so you don’t hear the Sirens’ call to panic-sell. And hopefully, we'll all be alright eventually.
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Money Song of the Week
The vast majority of people in the US aren’t going to feel sorry for a millionaire who isn’t happy. But perhaps the readers of this site can spare a little sympathy for a wealthy person who feels sad. So, when WCI columnist Adam Safdi suggested I listen to Kacey Musgraves’ 2024 song Lonely Millionaire for Money Song of the Week, I was all about it.
As Musgraves suggests, millionaires want to be loved and fulfilled. They don’t want to be stuck by themselves on their private jets and gold watches.
As she sings,
“Who wants to be a lonely millionaire?/Comin' home, ain't no one there/That you can talk to in your king-size bed.
Be careful what you wish for, I see it all the time/The money and the diamonds and the things that shine/Can't buy you true happiness.”
The subject matter of how money can’t buy you love and happiness is a constant trope in music. But that’s not what interested me when I started playing this song.
What really struck me about this song was that Musgraves didn’t perform like a country singer who used to croon about space cowboys and Mama’s broken heart. Instead, she reminded me of Sade at her most powerful who also samples beats from rapper JID and employs a powerful acoustic guitar. Maybe this type of music isn’t unusual for Musgraves (I’ve barely ever listened to her before, so I don’t have any kind of gauge on her, though she has said she makes country music for those who like country music and also those who don’t).
But I do know that the song surprised me in a good way.
“If you look at the records I’ve made since Day 1, they’ve always been a huge patchwork quilt of so many different influences,” Musgraves told Vogue. “I don’t think I can even really say 100% what my own music is.”
Asked specifically about Lonely Millionaire, she said, “There were definitely some examples that I’ve seen of that in the industry. But I saw a quote the other day that said something like, ‘The ultimate wealth is being in tune with the flow of nature.' The ultimate wealth is already in you, you know what I mean? It’s not an outside thing.”
Alas, this song is much deeper than I originally believed. Maybe I should listen to the rest of that Deeper Well album, because man, Musgraves certainly sounds like a smooth operator when she's singing.
More information here:
Every Money Song of the Week Ever Published
Reddit of the Week
For many readers, I imagine 1998 doesn’t seem all that long ago. But then you take a look at this grocery store receipt from 27 years ago, and it seems as though you’re looking at something from an entirely different world.
As for how grocery prices today compare to inflation gains from 1998 until now, you can look in the comments of that Reddit thread. You can see that recreating the list today costs about $91. But that $30.82 from 1998 is worth $60.82 in 2025 dollars. Which means we're paying more for groceries today than we did back then.
How worried are you about the latest stock market results? Are you staying the course? Do you think this time will be different?
[EDITOR'S NOTE: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at [email protected].]
You lost me at Suze Orman, but got me back at Mike Piper!
Honestly, I’ve got a lot of love for both!
That Ramit guy lost his mind on conservatives after the tariffs telling them all to leave the country. It was extremely unprofessional and anything but calm and collected. Not someone I’d ever take financial advice from.
Actually, I would take that Ramit’s financial advice, but definitely not the political.
For average people, there is not much choice except for staying on the course assuming the financial backbone and civilization would prevail. Despite the chaos, idiots and greedy in power, dysfunctinality of the political systems, sharp decline of average labor capability and attitudes in recent decades, etc., USA still has 100+ years of great foundation to allow all this s*** to continue for however long and average people still won’t starve to death like most other countries. In other words, there is no survival risk in the US. One literally can’t starve or freeze to death. So what is to worry about?
Sure if there is time and energy and extra money, one could move money around within different assets just to make one feel psychologically safe, but I seriously dpubt how big a difference it would make in the long run. Buffet said the down time is the time to invest in yourself, in your inner awareness, health, relationships, etc.
“Invest in yourself“ is always good advice, in good times and bad. Physically and emotionally resilient people are the ones who are best prepared to weather a storm. And while the government can confiscate everything physical that you own, it cannot take away from you anything that is found only in your head. So knowledge is an investment that can never be confiscated!
Speaking as a survivor of childood homelessness, and an observer of homelessness impact on my patients, I have to sadly point out that you are in error. People in the midwest do freeze to death and lack of consistent, healty food will kill you.
Karl, I am sorry to hear and thank you for pointing it out. Since I don’t have that experience I have over stated the survival fact. The point is that for people who worry about stock market tanking are already doing quite well compared to the majority of the society (most lower middle class or lower socialeconomic class never own stocks anyway in the USA). The chance of not surviving is rather slim so there is little point to worry about that. However, it is always a good idea to have a few years of living expenses in easily accessible investment vehicles or cash or money market so one doesn’t feel the pain of having to sell stocks to cover living expenses in sharp market decline.
It’s too early to tell. With each passing day there are tariff changes which affect directly and indirectly all Americans. It’s obvious there is no policy either on tariffs, how to bring manufacturing onshore and even how the American public is affected. We have had tariff legislation going back to the Washington Administration, some made sense, some has been disastrous. But never in the history of the Republic has what is happening now occurred. What we do know is that the powers that are making the policy admit it is inflationary. Take a look at the medical supplies – including chips, medications, even plastic tubing which goes into equipment made in the US – how much is made overseas? How will that cost be made up?
In the end, with tariffs, the government is picking winners and losers. We have always had a mixed economy with the government doing some things, the private sector others, the pendulum is swinging back to the government’s involvement in which industries thrive and which don’t. The lobbyists are just getting warmed up.
Can only speak for myself but in my opinion here’s what’s different this time: normally you have a government on the same side of the markets trying to work against the recession. In this case you have a few people happily and knowingly causing it, thinking at any point they can put the genie back in the bottle. Also, US leadership is naive and simplistic and he and his advisors are unaware of the biggest risk. He always wanted lower interest rates so he hoped to cause a recession and force Powell to cut rates. However as you’ve seen the biggest risk now is that interest rates are skyrocketing. He is now threatening the safe haven reputation of US treasuries. We are in the verge of a Liz truss moment and if you look at U.K. their rates never recovered after. So if he wanted lower rates to make US debt costs lower now they are going higher. Plus market says , if you cause a recession you need to borrow more as tax receipts drop so that also pushes rates higher. The new tariffs are the biggest (regressive) tax increase in many decades and will choke the Us economy. Leadership overplayed their hand thinking they’d force others to the table but as you saw twice this week we are already realizing the folly as we were forced to back down twice. Now the world sees best strategy is to just wait it out and watch US choke on the tariffs. Lower stock markets and lower consumer and business confidence cause lower spending. This causes layoffs and business is now afraid to invest so we get a recession with more layoffs and the cycle continues. You can’t stop it once it starts. The Wall Street titans who supported him are all now regretting it. As Ackman said he thought “economic rationality would be paramount”. Nope. NExt step will be corporate guidance cuts as earnings start which will be solved with layoffs. I really hope I’m wrong ! But I got out in SPX 5500 when he said 25% auto tariffs which in and of themselves are not something the economy can handle. There is a real chance that bad recession could get SPX down to 4000. I’ll buy back starting at 4500 finishing at 4000. I will happily be wrong and if so the cash I raised will go into bonds out of the money market it’s in now after the interest rate increase damage is done. For reference, for 30 years straight I never sold stocks at all and always bought heavy in 2008 and 2020 and 2022. I do believe this time is different as leadership is intent on dropping all global alliances and forging ahead alone but the hand was overplayed. Only hope now is if they fully back down in tariffs which could happen if treasury market breaks. Right now Bessent sees the risks but all cabinet is afraid to speak up. We may learn that our role as leader of the pack where yes we paid more than the others but got to call the shots was a lot better than the naysayers realized. Any void the US causes by backing out of the role as top dog may be filled by China and that’s not a good thing. Good luck everyone!!!
Good luck timing the market. Hope it works out for you. Make sure you consider both the likelihood and consequences of being wrong when making moves like you’re doing.
Thank you – consider the starting point where (other than safety cash) I have been zero percent bonds and 100% US equity for the last 30 years. (Was that a conscious choice: yes, I used to work as an equity analyst 25 years ago and was struck by how little growth and how few innovative new companies came out of Europe – and how little population growth there was there – so put my eggs into US basket and rode the “exceptionalism” wave). Either I come back in at lower equity prices (win), or for the time being I clip 4-5% in money market (win), or worst case I re-deploy into HY at 9% yield soon (win), or as you may have seen the muni yields have gone wild you can easily get equivalent of > 6% taxable yield….I rode US equities to the top, let it back off 10% and am now doing something I probably should…diversify!
As I said the other day, if somehow SPX 5000 last week was the bottom & its back off to the races I will be ecstatic because it means that the US financial system & economy hasn’t fallen apart. I was the biggest equity bull for decades but I have to call it as I see it and this admin has made many more asset classes much more compelling unfortunately. BTW go look at all the scatter graphs that show you what forward equity return you usually get when your recent 5 or 10 year annualized return is > 10%….its never good. As usual, its hard to see what makes it happen, but in this case now we know why!!!
Good luck! But if your ability to time the market is as good as you note, perhaps you should be managing a lot more money than your own. If you’re not confident about doing that, perhaps it’s because you recognize that maybe you just got lucky with your US-centric approach. Maybe you’ll get lucky again, maybe you won’t. But changing asset allocation in response to market events is generally a losing proposition for most people. It’s harder than it looks to both make the right move and time it well.
Dude, bold statement comparing Musgraves to Sade! kiss of life was actually our wedding song!
Yeah, definitely I love that the market is crashing and I’m always tempted to buy stocks on sale and maybe even use my emergency fund to put some money in. Though I do understand some people freak out as my circumstances are quite different. I’m amazed, however, that even doctors with stable income and they might even be dual doc couples will still freak out despite having very stable job security. even doctors through the pandemic that were mostly outpatient survived having their outpatient visits and outpatient surgeries canceled and having their income drop. just as long as you have an adequate emergency fund you should be able to stay in the game and not have to sell your stocks. I would’ve thought seeing how the economy and stocks live through a worldwide pandemic would increase people’s risk tolerance!
In the end, I believe we really have to teach optimism in order to increase risk tolerance and not freak out. I guess I’m just an overall optimistic guy and believe in our country and humanity that this too shall pass.
I think this time may be different. The US has lost its credibility and the US dollar may lose its reserve currency status gradually. Nothing is certain in the future but I think it’s irreversible. Once that happens, all the tried and true investment strategies/advices like “buy and hold”, “buy index funds/ETFs”, “4% rule” will fail, or least produce disappointing returns. Yes, I’m quite pessimistic. But I believe that the rules of the world has changed and with it comes new rules of successful investing that all of us have to re-learn.
So what are you going to do about it and what will the consequences be if you’re wrong?
My parents live in Canada. I’m not Canadian citizen though. But I’m thinking of converting some US dollar to Canadian dollar and invest in Canada. That “if I’m wrong” risk is there and I’m still thinking how I could minimize it.
There is a reason the US doesn’t use the British pound and instead uses the dollar. Though the original 13 states were British colonies, the British pound was used to keep accounts; there was very little coinage. The Spanish dollar was the hard specie and the de facto reserve currency. In colonial VA, books were kept with three columns: hard specie, tobacco and British pounds. (Tobacco script was the currency.) Eventually, in the 19th century, the British pound became the reserve currency and now it is the USD (the dollar sign itself is a nod to the peso). That reserve status is based on several things including stability both political and economic as well as trade and international agreements and in short, reliability. Whether it retains the status isn’t an absolute.
Very weird title considering SP 500 ended the week higher than it began
Sorry, this wasn’t a reply to you. Meant to be it’s own comment
The challenges here are in the realm of something new? The administration seemed to be targeting the market to “crash it” to get the Fed to lower interest rates…and is using a poorly designed and executed archaic tariff based trade policy. History has not been kind to high tariffs.
I have read the commentary on the tariff rationale and the platitudes about “taking our medicine” for the greater good and “bringing back manufacturing”, but they did not convince me…or many economists.
One gets the impression that a pilot using intuition and visual flight rules is taking the economy for a ride in a dense fog. The rapid about face after the bond market “got yippee” was scary, uninspiring and amateurish, and markets don’t like uncertainty.
There is a reason that you can now find dozens of articles suggesting that this may have a lasting effect on the value of the dollar and lead to stagflation. Let’s hope these are all wrong.
Several of my friends chided me for not having sold a chunk of equities in anticipation of the inevitable tariff drop or “correction”. Can you call this a correction? It was specifically related to a policy move that increased the risk of a recession. It’s rather “herky jerky”, isn’t it?
I have an affluent friend whose portfolio dropped 1.4 million. He uses the bucket approach like I do and has cash, MYGA, and bonds to ride out any downturn for several years.
My own four year emergency fund (cash, HYS, short term treasuries, bonds, and CD’s) is comforting at age sixty one, as is being semi-retired and still having an income that pays all our bills.
Since corrections and bear markets are inevitable, I suppose it’s all about allocation, but this felt very “self-inflicted”. Some of the numbers are reminiscent of the COVID bear, but no Fed to the rescue…yet.
Should I be worried? I might be retiring in a couple of years. Allocation is 80/20. I have 3 years living expenses in cash. Should I make any moves now? Or keep calm, carry on?
I wouldn’t, but impossible to answer your question without a functional crystal ball, which I don’t have.
Yes, this time is different – for me. This is because I exchanged a huge bunch of company stock for ETFs and realized capital gains in 2024 and then underpaid my estimated taxes. Come tax day, I’m having to sell some of those ETFs at a loss to pay my taxes. Lesson learned!
Can you raid your cash/emergency pile?
Replenish it when the market goes back up.
I blew past it. 🙂
Via email:
I suspect this time is different. The US will become a monarchy and there will not be any elections next year. Other countries will pull money out of treasuries.
Wow. Who is next in line after the very elderly President Trump? Don Jr?
While the first to admit that I don’t know for certain how all of this will shake out, I’ve been thinking a lot of something that transpired during the GFC. During the very darkest days of the crisis in 2008 I happened to serve on a patient safety task force along with a former US Secretary of the Treasury, and that individual guaranteed the rest of us that Congress would authorize a bailout (which seemed very much in doubt at that moment) and that the financial system would eventually emerge intact. He was correct, of course, and whether or not it should, that gives me hope for our current situation . . .
If it gets significantly worse, I’ll do some Roth conversions. I’ll also reassess my risk tolerance after the market recovers. Feeling ok now, but we’ll see how it plays out.
Title is very odd considering the market ended the week higher than it began
Hmmm.
The tariffs were poorly rolled out.
The market drop in response was large.
The bond market signaled a COVID-like response at the same time.
Recession odds predictions spiked.
The dollar has dropped notably.
The fact that there was a bounce after Trump paused the tariffs and said it was because the bond market got “Yippy”… don’t you think that’s rather unprecedented, that the president rolls out a massive tariff program and then delays it 90 days immediately because of a massive bounce in treasury yields.
Generally, the POTUS doesn’t go to a conservative social media platform and announce it’s a good time to buy, and then change policy. That’s definitely odd…
The title is a good one. The question is valid.
It’s simply not an accurate title. The market didn’t tank last week – it went up. Say something about how the market was volatile last week or something, but this is click-baity and false. That’s all I’m pointing out – I have less than zero interest in debating politics on on the internet
What? WCI is deliberately using titles to try to get people to read their stuff? That’s weird. And an art form. And very deliberate. And the market did tank last week, even if it recovered afterward.
It doesn’t appear this is thought out at all. 33% of US steel is imported, yet the Administration wants the USN to expand to 381 ships. Where is the steel coming from? The AUKUS pact between Australia, the United Kingdom, and the United States aims to enhance US security in the Pacific and counter China; part of that is the US supplying nuclear-powered submarines to Australia. Again, where is the steel coming from? The Icebreaker Collaboration Effort – the ICE Pact – is an agreement between the US, Canada and Finland. Canada and Finland have the knowledge to build their components at a fraction of the cost. The entire tariff “policy” seems ill thought out if the goal is to make the US more secure.