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Dear Financial Samurai,
Did everyone survive one of the most volatile weeks in the stock market since the COVID lockdowns began? The 9.5% rebound in the S&P 500 on Wednesday, April 9, marked the index’s third-best day since the 1950s, after Trump announced a 90-day pause on the reciprocal tariff war—with the exception of China.
Although the S&P 500 dropped over 3% the very next day, the news on Saturday morning, April 12, that smartphones, computers, semiconductors, and other tech components will be exempt from the reciprocal tariffs should give the tech sector a boost this week. That said, with so many tit-for-tat escalations, it’s hard to say anything for certain.
For those wondering whether our current situation is like the 2009 Global Financial Crisis—it’s not. Household and corporate balance sheets are far stronger, and lending has remained tight since then. If we had to quantify today’s economic stress, I’d say we’re at about 20% of the severity we experienced back then.
Preparing for the Worst Anyway
That said, it's still smart to plan ahead in case things deteriorate. In last week’s newsletter, I shared my bear market investment game plan, which leans roughly 80% toward offense—continuing to invest in risk assets. This strategy aligns with my belief in buying the dip, no matter how painful it may feel.
This week, however, I’m shifting focus to something even more important than investing: protecting family livelihoods.
If the chaos drags on through summer, mass layoffs are inevitable. And if you're part of a single-income household with kids, you could be especially vulnerable.
I've coined a new term: DUPs, short for Dual Unemployed Parents. My wife and I have voluntarily been DUPs since 2017. Despite having enough passive income, a paid-off home, and years of extensive planning, I still find my stress levels elevated—by about 30%—given everything going on.
In fact, I’m nearly back to that February–June 2020 state of mind, waking up at 4 a.m. from worry about my family’s health and our investments. So even voluntary DUPs like us are not immune to anxiety.
To help those who may find themselves suddenly jobless with kids, I wrote a new post: The Precarious Life Of DUPs to help you prepare for a tremendously difficult situation.
The Push to Lower Interest Rates and Protect Homes
You might be wondering: Why go to economic war with multiple nations at once? Why not take a more targeted approach to avoid damaging our own economy?
According to Treasury Secretary Scott Bessent, the answer is to force interest rates lower and help the bottom 50% of Americans, those burdened by debt and with minimal investments.
Lowering Treasury yields would not only ease consumer debt but also reduce our national interest expense. Unfortunately, the opposite has happened.
The 10-year bond yield spiked from 3.93% on April 4 to as high as 4.55% on Friday, April 11. The likely reasons? Foreign nations like Japan and China, now in tension with the U.S., have been dumping U.S. debt. Meanwhile, rising inflation expectations—now projected at ~6.2% in 12 months per the University of Michigan survey—have led domestic investors to sell as well.
Thankfully, on Friday, Boston Fed President Susan Collins offered some relief by stating the Fed is prepared to step in to keep markets functioning if needed. The surge in yields is ominous, but it’s also why I believe we'll see meaningful progress on the trade front before summer arrives.
Out of curiosity, I checked with a couple top agents here in San Francisco as to whether all this volatility has caused some hesitation among buyers. Both said no. One said she just closed four deals with another one the way.
Read: Sacrificing The Stock Market For Your Loving Home
Great Speaking With Many of You!
As part of the Millionaire Milestones book promotion (buy 55 hard copies and get a bulk discount), I had the pleasure of speaking with many of you about your finances and career plans last week.
It was rewarding to help you gain perspective, uncover blind spots, and identify areas for optimization. The strong demand to speak has been both humbling and likely a sign of the uncertain times we’re in.
This week, we're back in Lake Tahoe for Spring Break, enjoying the last bits of snow. But I’ll be resuming 1-on-1 consultations on Friday, April 18. If you're interested in getting an objective review of your finances, just fill out the short form at the bottom of this page, and we’ll set up a time.
May this week’s markets bring some continued relief!
To your financial freedom,
Sam
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