Historians doubt Marie Antoinette ever said, \u201cLet them eat cake.\u201d<\/strong><\/em> The apocryphal tale is\u00a0that upon hearing that French peasant<\/span>s had no bread, she coldly suggested they eat\u00a0brioche\u00a0instead \u2013 a richer, more expensive pastry. Shame on you, Marie! <\/em><\/p>\n But historians doubt she ever said it. The quote likely originated decades earlier and was used to criticize out-of-touch aristocrats. Still, the myth stuck, fueling the image of a clueless queen and symbolizing elite indifference during the French Revolution. <\/p>\n Fast forward to modern times: I\u2019ve been reading account after account of panic selling this week. The \u201cTariff Tantrum\u201d<\/em> or \u201cTrump Slump\u201d<\/em><\/a> has instilled many investors with a deep level of fear. <\/p>\n For some, the fear is purely financial (\u201cwill my portfolio recover?\u201d<\/em>)<\/p>\n For others, it\u2019s socio-political (\u201cwhat will he do next?!\u201d<\/em>). <\/p>\n For many, it\u2019s a mix. People are abandoning their plans and abandoning their portfolios. <\/p>\n I do not like seeing this. I don\u2019t want anyone to make short-term, emotional portfolio decisions. But there are billions<\/em> of people out there, and at least many millions<\/em> are market participants. I cannot change all<\/em> their minds. None of us can. <\/p>\n Unfortunately, some investors need to make a mistake in order to learn the lesson. And that\u2019s why, as uncallously as I can muster, I think to myself: Let them trade. <\/strong><\/p>\n Let\u2019s walk through the most frequent reasons I see people trading right now. <\/p>\n There\u2019s only one \u201cgood\u201d reason to trade right now: rebalancing your portfolio. <\/strong><\/p>\n Personally, I rebalance both based on\u00a0calendar<\/strong>\u00a0and on\u00a0thresholds<\/strong>. <\/p>\n Meaning, I rebalance every 6 months, simply to ensure that I won\u2019t go years without doing it [calendar<\/strong>]. I\u2019ll also rebalance when my portfolio allocations exceed 5 percentage points off target [thresholds<\/strong>].<\/p>\n There is no emotion in these decisions. It\u2019s purely rules-based. <\/p>\n If your personal rebalancing rules are kicking in right now, carry on. <\/p>\n PS \u2013 yes, you could tax-loss harvest<\/a> or execute a Roth conversion<\/a> as a function of falling stock prices. But neither of those practices should involve selling one asset to buy a different one. Personally, though, as I write about in the links above, tax-loss harvesting is not the miracle drug that many DIYers believe it is, and it doesn\u2019t make sense to wait for bad markets to execute Roth conversions. <\/em><\/p>\n Many people are making drastic changes to their portfolio based on the belief that the economy, this new trade war, the world, etc. is heading in the wrong direction. The belief is that \u201cit will get worse before it gets better.\u201d<\/em> Or even, \u201cit\u2019ll get worse indefinitely<\/strong>.\u201d<\/em><\/p>\n You may be right. I may be crazy. <\/p>\n But I don\u2019t know.<\/strong> <\/p>\n Sure, I don\u2019t like what\u2019s been done. I don\u2019t agree with the decisions being made or, for that matter, many of the people making those decisions. <\/p>\n But I do<\/em> know, for sure, that if you know, for sure<\/em>, that stocks are a poor investment going forward, I don\u2019t know enough to determine if you are right or wrong.<\/strong> <\/em>Maybe it\u2019ll get worse. Maybe not. I do not know. <\/p>\n Was that worded poorly? Basically: you might be certain, but I\u2019m not, and I don\u2019t know how you could be! <\/strong><\/p>\n Some of you will read those words and say, \u201cJesse, of course it\u2019ll get better. That\u2019s what humanity does! We improve over time.\u201d<\/em><\/p>\n Others will say, \u201cJesse, current events are pure insanity. Humans are irrational beasts! The world as we know it is crumbling. ARE YOU THAT BLIND?!<\/strong><\/em>\u201c<\/p>\n Financial planning and portfolio design are exercises in probability and risk management. If I knew where the world would be in five years, I would triple down on my specific bets and become a billionaire. <\/p>\n If you<\/em> know where the world will be in five years, I encourage you to do the same thing. Go make your billions! (\u2026and don\u2019t forget about little ol\u2019 Jesse when you make it big!) <\/em><\/p>\n But if you\u2019re like me and you\u2019re not sure where the world is going, then I\u2019d ask this: <\/p>\n How is that simple truth \u2013 that you and I cannot predict the future<\/em> \u2013 any different than it was a month, a year, or a decade ago? <\/strong><\/p>\n It\u2019s not! We\u2019ve never<\/em> known how the future would unfold. Never. I build financial plans \u2013 for myself and others \u2013 with that fact in mind. Good portfolio design accounts for the fact that the future is inherently unknowable. That is one of the risks we take, and the major reason we investors demand compensation for investing.<\/p>\n And since that fact hasn\u2019t changed, I am not changing my portfolio allocation. <\/p>\n Time will tell. You may be right. I may be crazy. But I\u2019m not betting on it. <\/p>\n Other people look past the causal events (political, global, economic) and simply focus on their personal financial plans. They are concerned that their portfolio dropped too far and quickly over the past week and that the situation is untenable based on the sheer financial math. They need to cut their losses (from stocks) right now and re-allocate to a much more conservative portfolio.<\/p>\n The crazy thing is, some of these people might be right! <\/strong><\/p>\n But if that\u2019s the case, that truth (\u201cI ought to be more conservative\u201d<\/em>) has been real for years<\/strong>. They should have reallocated their portfolio years<\/strong> ago. And only now, faced with the downside of carrying so much risk, are they realizing they had too much risk in the first place.<\/p>\n This is the driver who, only after crashing, is realizing they\u2019re a maniac on the road<\/a>. The crash itself isn\u2019t the reason to change. It\u2019s merely the proximate event. <\/p>\n Risk tolerance seems quaint when the market is doing well. But sudden negative shocks often make investors realize, \u201cMy risk tolerance isn\u2019t what I thought it was.\u201d <\/em>This is where we insert that Mike Tyson \u201c\u2026until you get punched in the face\u201d<\/em> quote. <\/p>\n These tariffs didn\u2019t change<\/em> the truth. It just brought the truth to light. <\/p>\n So, some people have this fear and they are right about it! <\/em>They should have been making these changes years ago. <\/p>\n Another group of people share the same fear \u2013 that their portfolio cannot handle such losses, or is misallocated<\/em> \u2013 but are simply mistaken. Despite their fear, they ought to \u201cstand there and do nothing,\u201d<\/em> <\/a>as John Bogle would say. <\/p>\n That said, I completely understand where this mistaken fear comes from. Why? <\/p>\n Take a 65-year old retiree with $2M and a 60\/40 portfolio. Their portfolio has likely decreased ~$150,000 in the past week, and $250,000 over the past 6 weeks. This is the equivalent of multiple years of living expenses. Scary stuff! I understand why this retiree might want to abandon ship. <\/p>\n However, their 40% allocation to bonds has remained essentially stable. That allocation accounts for 8-10 years of living expenses. The bonds are buying them time \u2013 literally! They must ask, \u201cShould I assume my stock allocation can recover \u2013 <\/em>and then some! \u2013 over the coming 8 to 10 years?\u201d<\/em><\/p>\n The answer is likely \u201cyes.\u201d It\u2019s not a guarantee, but then again, it never was in the first place. <\/p>\n Some investors are citing specific fundamental reasons for jumping ship. <\/p>\n Inflation is coming! A recession will hit before the end of the year!<\/em> This sector is going to get crushed! That industry relies exclusively on imports! <\/em><\/p>\n Guys \u2013 ALL of that fear and ALL of that probability is already priced into the market. <\/p>\n Now, if the worst case comes to pass, then the stock market will surely get worse before it gets better. But if President Trump and\/or other world leaders deviate in the next few weeks or months, then perhaps none of those fears will come to pass. The market is trying to suss that out, and it\u2019s changing by the There\u2019s a good reason why the biggest UP<\/em> days in the market occur concurrently with the biggest DOWN<\/em> days. All of this uncertainty shakes out in both directions. We suddenly realize we\u2019ve been more optimistic or pessimistic than we should have been.<\/p>\n The point is: whenever the market turns around, it\u2019s likely to be sudden and sharp. If your money is on the sidelines, you won\u2019t have time to get back in. <\/p>\n The same phenomenon happened in November 2023. It was amazing to watch unfold.<\/a> And it will happen again \u2013 I just don\u2019t know when, and neither do you!<\/em><\/p>\n Some investors see current volatility as a chance to buy more stocks. <\/em>\u201cBuy the dip!,\u201d<\/em> <\/a>they yell. <\/p>\n \u201cBuying the dip\u201d<\/em> isn\u2019t smart. Why? <\/p>\n An investor with an evidence-based financial plan shouldn\u2019t be holding onto that much cash to begin with. <\/strong><\/p>\n Sure, if we\u2019re talking about a tiny percentage of excess cash that\u2019s accumulated in your bank account, or interest and dividends in your brokerage account, then yes \u2013 go ahead and buy the dip. That cash has only been there for weeks or a few months, and it hasn\u2019t crossed your mind to invest that money yet. <\/p>\n But if you\u2019ve been holding 10% (or more) of your net worth in cash, waiting for a moment like this, the simple truth is that you\u2019re playing a losing game. If it worked out for you this time, you got lucky. If you continue to play this game (hold cash, wait for a dip), <\/em>you will suffer cash drag in the long run. <\/p>\n Buying the dip is like going to the casino. When it works, you feel smart. But the math is simple: you\u2019re better off not playing in the first place. <\/p>\n You can lead a horse to water, but you can\u2019t make them drink. There are many reasons why people are trading in their portfolios right now, and most of those reasons are not good. Unfortunately, history would tell us that many people learn painful lessons this way. Perhaps it\u2019s the only route to learning those lessons. I\u2019m just not sure. \u201cLet them trade stocks.\u201d<\/em><\/p>\n The only things you and I can do is: <\/p>\n It\u2019s not fun out there, but that\u2019s part of the investing process. <\/p>\n If you found this helpful, let me know. <\/strong><\/p>\n If you found this tone-deaf, also let me know. <\/strong><\/p>\n Cheers! <\/p>\n Thank you for reading! If you enjoyed this article, join 8500+ subscribers<\/strong><\/a> who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week. You can read past newsletters<\/strong><\/a> before signing up.<\/p>\n On that note, our podcast \u201cPersonal Finance for Long-Term Investors\u201d<\/a><\/strong><\/em> is by far outpacing this written blog. Tune in and check it out.<\/a> <\/strong><\/p>\n -Jesse<\/p>\n![\"\"](\"https:\/\/bestinterest.blog\/wp-content\/uploads\/2025\/04\/image-19-1024x735.png\")
<\/figure>\n<\/div>\nWhy Are People Trading Right Now? <\/h2>\n
The *ONLY* Good Reason<\/h3>\n
![\"human](\"https:\/\/bestinterest.blog\/wp-content\/uploads\/2025\/04\/pexels-photo-6990404.jpeg\")
<\/figure>\n<\/div>\n\u201cIt\u2019ll Get Worse\u2026\u201d<\/h3>\n
![\"\"](\"https:\/\/bestinterest.blog\/wp-content\/uploads\/2025\/04\/image-21-1024x493.png\")
<\/figure>\n<\/div>\n![\"\"](\"https:\/\/bestinterest.blog\/wp-content\/uploads\/2025\/04\/image-22-1024x576.png\")
<\/figure>\n<\/div>\n\u201cFuture Events Aside, My Plan\/Portfolio Can\u2019t Handle This\u2026\u201d<\/h3>\n
![\"\"](\"https:\/\/bestinterest.blog\/wp-content\/uploads\/2025\/04\/image-23.png\")
<\/figure>\n<\/div>\n\u201cInflation! Recession! This Industry, That Sector!\u201d<\/h3>\n
day<\/s> hour<\/s> minute. <\/p>\n![\"\"](\"https:\/\/bestinterest.blog\/wp-content\/uploads\/2025\/04\/image-24-1024x1016.png\")
Buy The Dip?<\/h3>\n
![\"\"](\"https:\/\/bestinterest.blog\/wp-content\/uploads\/2025\/04\/Screenshot-2025-04-08-at-3.42.25\u202fPM-1024x473.png\")
Let Them Trade<\/h2>\n
\n
![\"\"](\"https:\/\/bestinterest.blog\/wp-content\/uploads\/2025\/04\/Screenshot-2025-04-08-at-3.43.56\u202fPM-1024x626.png\")
<\/figure>\n<\/div>\n