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If the tariff-triggered drop in your 401(k) balance has got you sobbing into a pint of Ben & Jerrys, youre not alone. U.S. and global markets have yo-yoed in reaction to the current administrations inexplicable tariff wars. And since this market downturn is a direct result of American foreign economic policy, we may not be able to just wait for a recovery in the next few months (or years). While theres no promise of fiscal unicorns and rainbows at the other end of this, economic history may offer some guidance. The Smoot-Hawley Tariffs None of us has ever lived through a tariff-triggered market crash, which is part of the reason why were all chewing our fingernails. But just because this is a new worry for modern investors doesnt mean our current situation is unprecedented. America has been through a tariff trade war before, thanks to the work of the improbably named Utah Senator Reed Smoot and Oregon Representative Willis Hawleytwo men without a single first name between them. You may only remember the Smoot-Hawley tariffs of 1930 as part of the mind-numbing lecture Ferris Bueller missed on his day off, but this act raised import duties in an attempt to protect American farmers and businesses. Unfortunately, the Smoot-Hawley tariffs prompted retaliatory tariffs, which further entrenched the financial crisis known as the Great Depression. Heres why the history with Messrs Smoot and Hawley is important: it gives us a precedent to look to. Any financial adviser worth their salt will tell you that past performance is no guarantee of future returnsbut understanding how markets have reacted in the past can offer some perspective on how markets may react in the future. Whats different about this market volatility The current financial turbulence stems from the presidents tariffs rather than a market crash like the 2008 housing bubble collapse. Thats important because we know how to plan for the worst-case scenario of a market crash. While anything but fun, market crashes are relatively common and repeat on a somewhat predictable seven-to-ten-year patternfollowed by an average recovery time of 1.4 years. Since our current heartburn-inducing market ride stems from Americas global retaliatory trade war, we cant necessarily count on the natural rebound that has occurred after every other destabilizing market event in recent memory. Any countries angry about Americas tariffs could make financial or policy changes that will continue to affect the U.S. market for years to come. There is simply no way of knowing what long-term effects there will be on our investments. Let tariff history be your guide Even though none of us can personally remember a tariff trade war, we can learn from the devastating effects of Smoot and Hawley teaming up, bleach and ammonia style, to impose massive tariffs. Looking back to see how other countries reacted to Americas isolationist financial and foreign policy in the 1930s and how the market responded to the subsequent tariffs being flung back and forth across borders like a game of hot potato, we can make plans and predictions based on the historical worst-case scenario. Specifically, Smoot and Hawley showed us that tariffs often lead to retaliatory tariffs, which can have a negative impact on the market. Even though there is no way of knowing what will happen, its probably a good idea for investors to buckle up for a bumpy ride. Best practices for surviving Trumps tariffs You can get to the other side of this economic nightmare if you keep a cool head and follow these strategies: Remember that the market will eventually recover For anyone who is 10 or more years out from retirement, you can feel confident that things will improve. Unless were in a dogs and cats living togethermass hysteria! type of extinction-level event, consider ignoring your 401(k) balance for a little while. Your investments will do better if you back slowly away from your portfolio and let the market recover. Forewarned is forearmed Just because the market will return to some semblance of normalcy without any effort on your part doesnt mean you should do nothing. Now is the time to shore up your finances by paying off high-interest debt, setting aside money into an emergency fund, finding ways to lower your expenses, and starting some secondary income streams in case of job loss or involuntary retirement. All of these actions will help your finances whether were in for a long stretch of tariff-induced market nastiness or things are about to come up roses. Invest conservatively as you get closer to retirement Your asset allocation is supposed to get less risky as you approach retirement, since that will protect your principal in case of a market downturn at the wrong time. If youre planning to retire in the next few years, you can make sure any new contributions you make to your retirement accounts are invested in low-risk-lower-return assets, like bonds, treasury funds, CDs, or other cash equivalents. While these investments arent going to grow like the market normally would, the market also may not grow like it normally would. Stashing your contributions into these kinds of investments will offer you more peace of mind that the money will be waiting for your retirement. You still have time for market recovery Once youre no longer in the flush of youth, you may assume you dont have the luxury of investing for the long-term. Its not like a 60-year-old can afford to wait out the market like a 30-year-old can. Except, you can invest like you have decades ahead of you. Because you do! Even while you approach retirement and during your retirement, you will keep a portion of your portfolio invested for the long haul. When you retire, you dont need all of your money right away. Youll keep a significant chunk invested for a longer time horizon, which helps ensure that your money will last your entire life. How to respond if youre already retired By far, retirees are the most vulnerable to a protracted market plunge. Going back t work or waiting out the market weirdness are generally off the table for retirees, so it can feel like there are no good choices. But that doesnt mean retirees are helpless in the face of larger economic forces. As with current workers and near-retirees, retirees can make plans now for the worst-case scenario. This might include: Reducing expenses: This is easier said than done, considering the price of eggs and everything else, but start thinking about ways to downsize your costs. Selling items: If you have a lifetimes worth of home goods, collectibles, or Precious Moments figurines sitting around, you may want to start selling some off. This could be a good way to increase your retirement income without having to take money from your investments. Considering a reverse mortgage: Since your home is likely your most valuable asset, a reverse mortgage could be a decent way to access cash from something other than your investments. Dont panicplan Panic is the leading cause of selling at the markets low point. Instead of selling off your investments to staunch the flow of tariff-induced anxiety, make a plan instead. If you assume the market may be bumpy for the foreseeable future, how will that change your financial decisions? Making investment choices based on that assumption will serve you well no matter what happens. In the best-case scenario, things will recover sooner than expected and this will be a footnote in your investing career. But even in the worst-case scenario, planning for volatility will help you make more rational decisionsand protect you from making your paper losses real by getting out of the market. It may be a bit of a grim sounding win-win, but its a heck of a lot better than crying into a pint of Chunky Monkey.
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E-Commerce
A lot has been written about gratitude over the past two decades and how we ought to be feeling it. There is advice for journaling and a plethora of purchasing options for gratitude notebooks and diaries. And research has consistently pointed to the health and relationship benefits of the fairly simple and cost-effective practice of cultivating gratitude. Yet, Americans are living in a very stressful time, worried about their financial situation and the current political upheaval. How then do we practice gratitude during such times? I am a social psychologist who runs the Positive Emotion and Social Behavior Lab at Gonzaga University. I teach courses focused on resilience and human flourishing. I have researched and taught about gratitude for 18 years. At the best of times, awareness of the positive may require more effort than noticing the negative, let alone in times of heightened distress. There are, however, two simple ways to work on this. Gratitude doesnt always come easily Generally, negative information captures attention more readily than the positive. This disparity is so potent that its called the negativity bias. Researchers argue that this is an evolutionary adaptation: Being vigilant for lifes harms was essential for survival. Yet, this means that noticing the kindnesses of others or the beauty the world has to offer may go unnoticed or forgotten by the end of the day. That is to our detriment. Gratitude is experienced as a positive emotion. It results from noticing that othersincluding friends and family certainly, but also strangers, a higher power or the planethave provided assistance or given something of value such as friendship or financial support. By definition, gratitude is focused on others care or on entities outside of oneself. It is not about ones own accomplishments or luck. When we feel gratitude toward something or someone, it can increase well-being and happiness and relationship satisfaction, as well as lower depression. Thus, it may assist in counteracting the negativity bias by helping us find and remember the good that others are doing for us every daythe good that we may lose sight of in the best of times, let alone in times when Americans are deeply stressed. How to practice gratitude Research has shown that some people are naturally more grateful than others. But its also clear that gratitude can be cultivated through practice. People can improve their ability to notice and feel this positive emotion. One way to do this is to try a gratitude journal. Or, if the idea of journaling is daunting or annoying, perhaps call it a daily list instead. If you have given this a try and dislike it, skip to the second method below. Gratitude lists are designed to create a habit in which you scan your day looking for the positive outcomes that others have brought into your life, no matter how small. Writing down several experiences each day that went well because of others may make these positive events more visible to you and more memorable by the end of the daythus, boosting gratitude and its accompanying benefits. While the negative newsThe stock market is down again! How are tariffs going to affect my financial security?is clearly drawing attention, a gratitude list is meant to help highlight the positive so that it doesnt go overlooked. The negative doesnt need help gaining attention, but the positive might. A second method for practicing gratitude is expressing that gratitude to others. This can look like writing a letter of gratitude and delivering it to someone who has made a positive impact in your life. When my students do this exercise, it often results in touching interactions. For instance, my college students often write to high school mentors, and those adults are regularly moved to tears to learn of the positive impact they had. Expressing gratitude in work settings can boost employees sense of social worth. In a world that may currently feel bleak, a letter of gratitude may not only help the writer recognize the good of others but also let others know that they are making a beautiful difference in the world. Monica Y. Bartlett is a professor of psychology at Gonzaga University. This article is republished from The Conversation under a Creative Commons license. Read the original article.
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E-Commerce
Greg Walton, PhD, is the co-director of the Dweck-Walton Lab and a professor of psychology at Stanford University. Dr. Waltons research is supported by many foundations, including Character Lab, the Bill and Melinda Gates Foundation, and the William and Flora Hewlett Foundation. He has been covered in major media outlets including The New York Times, Harvard Business Review, The Wall Street Journal, NPR, The Chronicle of Higher Education, The Washington Post, San Francisco Chronicle, and Los Angeles Times. Whats the big idea? Stanford psychologist Greg Walton reveals how small psychological shiftsknown as wise interventionscan create profound change in our lives. Through vivid storytelling and cutting-edge research, he shows how simple reframes can build trust, strengthen relationships, and unlock potential. From a teachers encouraging words to a brief moment of self-reflection before conflict, these subtle shifts can shape our futures in powerful ways. Ordinary Magic is a compelling guide to harnessing everyday moments for extraordinary impact. Below, Greg shares five key insights from his new book, Ordinary Magic: The Science of How We Can Achieve Big Change with Small Acts. Listen to the audio versionread by Greg himselfin the Next Big Idea App. 1. Little things can make a big difference. Ordinary Magic is about change, and how to create it. Sometimes, problems in our lives can seem fixed, like theres nothing you could do to make things better. Persistent struggles in school. Conflict in a relationship. Self-doubt. But we dont just have to wish things were better. It starts with noticing our little thoughts and feelingswhat I call surfacingand then creating the right space to address them. Say youre married. Its a happy marriage, but you and your partner have a persistent conflict. Will you have the right space to think through your conflict? One study found that seven minutes answering three reflection questions every four months for a year made conflict less distressing for couples, and helped stabilize marriages. Twenty-one minutes to save a marriage. Or say youre a teacher. You work hard for your students, giving them feedback so they can improve. But many of your students dont take up that opportunity. Why? Another study found that just 17 words increased the rate at which 7th graders took up their teachers feedback to improve their work for a higher gradeand increased their trust in teachers over the rest of the school year. Change like this can feel magical. But thisthis is ordinary magic. These solutions require no special degree. Theyre the kind of thing all of us can learn from, and put to work in our own lives. Everyone can be an ordinary magician. And all of us benefit from ordinary magicians around us. What this magic requires is a deeper understanding of ourselvesunderstanding the icky questions that pop up as we travel through life. And learning how, individually and together, we can answer these questions well. 2. Big problems can start small. A little thought, a shadow of doubt. Often, it starts with a question. But then things spiral out of control. Suppose you wonder, Does my partner disrespect me? Left to their devices, questions like this drive us down. If you think a fight means your partner doesnt love you, then you might hold back and be less forgiving next time. If theyre late, again, you might feel confirmed in their lack of respect. Then you withdraw or lash out. That undermines a relationship. Left to their devices, questions like this drive us down. Or say youre the first in your family to go to college. You wonder, Do people like me belong in college? Then youre excluded from a social outing. A professor says something unkind. You think, Maybe its truemaybe people like me dont belong here. You stop going to office hours, stop asking questions in class, skip that welcome event for a student group. Fast-forward and, six months later, you dont have close friends on campus. No mentor to guide your growth. Youre thinking about dropping out. Negative questions make us spiral down. They make themselves true. Then, they put our relationships, our achievements, and our health at risk. 3. Change starts when we understand the questions we face, or another person faces. Let me share an example: When our kids were little, we took them to and from a campus daycare by bike. So, at the end of a long day, wed bike home, the kids on tiny 12-inch wheels. Sometimes, theyd stop two blocks from home and 20 minutes past dinner time. Theyd sit on the curb and wail, Im tired! I thought of research by my good friend Veronika Job. Veronika showed that sometimes people take little cues of tiredness as a reason to stop, to pull back from their efforts, even on things they care about. Its like we have range anxietyyou feel youre running out when you work hard on something, long before you reach any actual limit. Then you hold back, even on something you care about. So, I decided to reframe the meaning of feeling tired to them. I took to saying, Its when youre tired and you keep going that you get stronger. It didnt always work. But I think it helped. A little later, our daughter Lucy was trying to bike up a steep and winding path on our way home. Wed taken to bringing chalk to mark how far shed gotten. One time, Lucy not only beat her previous record but crushed it. As Oliver and I whooped and cheered, Lucy said, You know how I did it? When I wanted to stop, I kept going. Isnt that lovely? In that story, I offered Lucy a new way to think about her effortsthat tiredness need not be a reason to stop. That she could keep going. That tiredness might even be an opportunityto get stronger. It freed Lucy to succeed. She used that way of thinking to achieve her goal. As I write in the book, Thinking is for becoming. This kind of change is quiet, not loud. But it frees us to spiral up. A small initial insight, a small change in direction, can lead us to vast new lands. 4. The icky questions we ask are reasonable, but they arent necessarily true. The questions come from the context were in. Of course, the first-gen college student wonders if people like her belong in college. Her family literally hasnt belonged in college before. That reasonableness is important. First, it means youre not alone. When youre asking a question like Do I belong?, Can I do it?, or Am I inadequate? theres nothing wrong with you. Youre not irrational or disordered or weird. Youre normal. Youre responding to the world as it is. But even as that question is reasonable, it neednt be true. Its answers youre looking for. Because questions like these are reasonable, we can learn to predict when people will ask them. When we see these questions clearly, we can learn to address them with grace and dignity, which can transform our lives. Thats an hour to change a life. In one study, my colleagues and I developed a 60-minute session early in college to help new students address the question, Do people like me belong in college? Students of color are often underrepresented in college, and sometimes, theyre represented as less able and less deserving. So, that question is most pressing for them. The exercise we developed shared stories from older students, who showed that almost everyone worries at first if they belong in college. Students reflected on their belonging worries, why theyre normal, and how they can improve with time. That improved African American students achievement through the next three years of college. A decade later, they reported being more satisfied in their lives, more successful in their careers, and taking on more leadership roles in their communities. Thats an hour to change a life. That didnt happen because students just remembered that experience. At the end of college, students couldnt even remember it clearly. And they didnt credit any of their success to it. Instead, addressing a persistent question about belonginga reasonable question that comes from the history of exclusion in educationfreed students to build friendships and mentor relationships, and those supports that helped them succeed. 5. This is work we do together. The most toxic questions are about who you are and who you can become. In the most difficult circumstances, when people look at you and all they see is something horrible, there must be space to tell your own story, a chance to tell that story in a way that other people can hear, a way to make that story real together. For more than a decade, Ive worked with leaders in the Oakland Unified School District to support students returning to school from juvenile detention. This circumstance poses terrible questions to both students and teachers. These students have been told, more or less unambiguously, that they do not belong here and are not wanted here. And its easy for teachers to wonder, Will this student care? Will they try? Or will they just cause trouble? The most toxic questions are about who you are and who you can become. So, we created a platform for young people, a way for them to introduce themselves to an educator of their choiceto share their values in school, such as being a good role model for a younger sibling, their goals, and the challenges they face. We find that young people use this platform to express, essentially, Im a good kid, and I want to succeed, but I need help. Can you help me? Then, we present this information to the educator the child selected. We emphasize that all kids need support from adults. This child has chosen you. Heres what they would like you to know about them. Please help. And then we say, Thank you for your work. We find this letter opens the hearts of educators to justice-involved youth. It helps them see that this is a kida kid who wants to succeed. They respond with support. In a first trial, this approach reduced the rate of student recidivism to juvenile detention by 40 percentage points, from 69 percent to 29 percent, in the following school term. Its the most powerful way I know to remedy mistrust in school. This is the change we need to help us achieve what we want to achieve, to do what we want to do, and to become who we want to be. Its a way to help other people in their journeys, too. In the process, we can make our society a little healthier, a little more together, and a little kinder. This article originally appeared in Next Big Idea Club magazine and is reprinted with permission.
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E-Commerce
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