Ramit Sethi’s Plan for Trump’s Tariff Turbulence: ‘I’m Building a War Chest’

John Schmoll

Mon, Apr 21, 2025, 4:01 AM 4 min read

The past several weeks have been trying for many American investors. President Trump’s Liberation Day for tariffs rattled the stock market, resulting in $10 trillion in losses for global equities between April 2 and April 9, according to Fortune. It’s understandable to react to the upheaval with fear. After all, many people lost real money.

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Personal finance guru Ramit Sethi understands this and in a recent newsletter to subscribers, he shared the four steps he’s taking in light of the current economic headwinds.

Selling stocks to stop the bleeding is an understandable emotional response, particularly when it comes to retirement. According to PBS, that causes two problems: it locks in losses and it could result in sellers missing out on potential gains.

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Sethi argued for investors not to sell their stocks. “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,” Sethi said. Selling stocks may make Americans feel better, but it can make the pain worse.

Panic is rarely a good thing when it comes to a falling stock market. While it’s not fun to see portfolios lose value from something out of your control, emotion-based decisions can be costly.

“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,” Sethi said. If the stock market is indeed facing a bear market, the stock market historically always recovers from them, according to Fidelity.

Having emergency savings is a hallmark of personal finance. Most experts recommend having at least three months of living expenses saved, if not six. Sethi recommended for Americans to now aim for a 12-month emergency fund.

“The people who win in a downturn are the ones who prepared before things got bad. If your income suddenly disappears, what’s your plan? Start cutting discretionary spending now, before the world forces you to,” Sethi explained.

Sethi further argued this point in a post on X. “If I had a 3% rate and I was paying an extra $200 per month towards my mortgage, I would immediately stop and put that money into savings,” Sethi said.