The Dividend Cafe The Psychology of Trump, of You, and of Markets
Apr 11, 2025
Explore the turbulent waters of market volatility triggered by political events and trade announcements. Discover how the VIX index signals market fear and the historical patterns of recovery. Delve into the psychological influences that shape investor behavior during downturns. Bond market dynamics and global economic shifts also play crucial roles. The conversation highlights the strength of dividend growth investing as a stable strategy amidst uncertainty.
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Handling Volatility
- Review how to handle severe market volatility.
- Remember that quick, violent, and uncertain downside volatility requires a specific approach.
VIX and Market Fear
- The VIX, or "fear index," measures market volatility through options pricing.
- High VIX levels historically correlate with low market pricing and attractive, albeit risky, entry points.
Trump's Tariff Reversal
- Trump reversed his tariff announcements after four days of market sell-offs.
- This reversal followed a 3,400-point market rally in just two and a half hours.