- Global markets remain down over the week despite temporary rally
Global markets have started to rally again after a tumultuous week in which President Trump’s tariffs were implemented.
Trump has paused tariffs for 90 days on all countries except China, which now faces a combined levy on imports of 125 per cent.
The S&P 500 jumped 9.5 per cent after the news before opening lower today, while Asian and European markets opened in the green.
The FTSE 100 soared as much as 6 per cent on Thursday before settling to trade up 4 per cent by the afternoon.
Despite a rally in equity markets, global markets remain down over the week with some markets trading lower than they did at the start of the year.
So is it a good time to buy stocks at a discount, or should investors avoid the market chaos?
Buy the dip? Trump’s tariffs have led to many stocks trading at a discount, but experts warn investors to avoid making decisions on short-term market moves
Is it time to buy cheap stocks?
There is a temptation to buy more stocks and shares when the market has plummeted, or what investors call ‘buying the dip’.
The idea is that investors buy an asset when its price falls due to factors outside of its control, in anticipation of prices recovering in the near future.
The danger for investors is that the market rout could be prolonged, especially if China and the US ramp up their tariffs and it descends into a full-blown trade war.
Experts are warning investors to be cautious at the moment because there is no telling whether the market rout could be prolonged.
Kate Leaman, chief market analyst at AvaTrade, says: ‘The 90-day window does little to resolve underlying tensions, especially with China still facing tariffs as high as 125 per cent.
‘Broader trade uncertainty, coupled with inflation data and shifting central bank policy, means volatility is likely to persist.
‘In this environment, the timeless investment principle holds; don’t try to time the market. While the reaction may feel encouraging, lasting gains will depend on real progress – not just temporary pauses.’
Should you sell your investments?
There is also a temptation to consider selling your stocks to stem losses, but experts warn against this.
If you react to short-term market fluctuations and sell your stocks now you could harm your long-term investment returns when the market rallies again.
The main piece of advice from experts is not to panic and keep invested. The FTSE 100 is still up 36.6 per cent over five years, while the S&P 500 is up 90 per cent, the Nasdaq 103 per cent and the Dow Jones index 67 per cent.
It shows that staying invested reaps dividends and selling when the market has already fallen is not the best long-term approach.
Ian Futcher financial planner at Quilter says: ‘Recent swings in global equity markets following the U.S. decision to pause tariffs for most countries – but not China – highlight how sensitive investors are to geopolitical developments.
‘While it’s encouraging to see signs of diplomatic flexibility, the persistence of elevated tariffs on Chinese goods still poses risks to corporate profits and broader economic stability.
‘For investors, this is a reminder that market sentiment can shift quickly, and that staying invested through uncertainty can often prove more rewarding than trying to second-guess the news cycle.
‘Investors should remain calm amid volatility and ensure their portfolios are diversified across regions and asset classes.
‘Knee-jerk reactions rarely serve long-term goals. If anything, this period demonstrates why remaining invested and staying the course can often yield better outcomes than trying to time the market.’
Dan Caps, investment manager at Evelyn Partners adds: ‘The markets have already fallen and selling now only crystallises these losses. If you do sell your investments, the chances of timing the bottom of the market and reinvesting to participate in the recovery are very low.
‘It is much better to ride out the storm and capture the long-term rewards of investing in the stock market.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .