Medicine Hat financial advisor says ‘stick to your plan’ as stock market plummets

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Stocks worldwide dropped even lower Friday after China matched U.S. President Donald Trump’s big raise in tariffs in an escalating trade war.

The S&P 500 was down 3.8 per cent in midday trading, after earlier dropping more than 5 per cent — following its worst day since COVID-19 impacted the global economy in 2020.

The Dow Jones Industrial Average was down 1,349 points, or 3.3 per cent Friday morning, and the Nasdaq composite was 3.8 per cent lower.

The price of crude oil dropped to its lowest level since 2021.

Other basic building blocks for economic growth, such as copper, also saw prices slide — on worries the trade war will weaken the global economy.

Frost said we as financiers can only control our own activity, and tells clients to continue with their current plan and save the way they normally do.

“Basically, if your plan says you need to save $500 a month for the next 18 years, then just keep doing it, right?” he said.

“Today’s shortcomings aren’t going to change your long-term retirement. I don’t think that we’re going to get a massive global meltdown or anything like that at this point,” he added.

“It is a normal and expected pullback within the confines of the market.”

Dan Frost. Courtesy/My Business Magazine

Frost said there’s two sides to the market: the buyers and the sellers.

There are big companies and organizations who short the market, selling what they don’t own.

He said companies have huge amounts of capital and are able to push the market down. When they start to see cracks in the surface of the economy, they’ll push against the market and force it to go down.

When the market goes down, the companies will buy it back cheaper, and make a profit.

Frost said one of the first experiences he had in financial advising was the global financial crisis in 2008, where organizations had created a massive problem in the markets.

Since 2009, he said the market has almost gone up for 16 straight years with the exception of a few blips in 2015, 2018 and 2020.

He said this is one of the first dips since, and even with the dip yesterday, the market’s still exponentially higher than it was in 2009.

Frost said the worst thing anybody could do right now is panic and sell, an action he called capitulation, where people “throw the baby out with the bathwater”.

“The U.S. government, if they decided to back off on their tariffs or change them to some degree, the markets could say, ‘Hey, this actually doesn’t affect us as much as we think’,” he said.

“It could turn around. And I don’t know what the future is any more than anybody else. So my advice and guidance to clients is stick with your plan,” he added.

“Do the right things. Spend less than you make. Own more than you owe. And this too shall pass.”

Frost said, although this is one of the worst weeks for the stock market on record for the past five years, he encourages people to wait and figure out what will happen.

by Jayk Sterkenburg

Medicine Hat financial advisor says ‘stick to your plan’ as stock market plummets

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