By Elizabeth O'Brien

The S&P 500 has entered correction territory, and investors may be wondering if it's a good time to scoop up shares that have gone on sale. For retirees, the answer is: probably not.

The S&P 500 is down 10% this year, while the tech-heavy Nasdaq Composite is down nearly 16%. Extreme volatility has characterized the market since the "Liberation Day" launch of President Donald Trump's on-again, off-again tariffs in early April. Plenty of uncertainty remains about how the tariffs will be implemented, and their impact on the broad economy.

The upshot? "This is not a buy-the-dip market," says Steven Conners, founder and president of Conners Wealth Management in Scottsdale, Ariz.

Traders can profit off short-term volatility, of course, while long-term investors should continue to dollar-cost-average into their 401(k)s. But retirees have a shorter horizon -- and stocks may well have farther to fall.

Companies from Walmart to Alcoa have cited tariff uncertainty in their first-quarter earnings reports. Shoppers are also cautious, and consumer spending accounts for about 70% of the U.S. economy. If anything, Wall Street's worst-case forecasts may not be bearish enough, some experts argue.

Concerns about stagflation-- the dreaded combination of stagnant growth and inflation--have been mounting. Even if it's not as pronounced as it was in the 1970s, stagflation would mean a "long, slow crawl" for the U.S. economy, Beth Ann Bovino, chief economist at U.S. Bank, said at a Barron's Live event on Monday.

That doesn't mean it's time for retirees to panic. A well-diversified portfolio can see you through a downturn, especially with an adequate cash cushion. But it does suggest that it might not be the time for opportunistic buying.

Justin Zacks, vice president of strategy for North America at Moomoo Technologies Inc., a trading platform, says Nvidia was one of the platform's most popularly traded stocks in the first two weeks of April including among investors 65 and over.

Nvidia is down 24% for the year, and it might look tempting. But the chip-maker is caught squarely in the crosshairs of Washington's trade tensions with China, and it still trades at a steep premium to the S&P 500.

Nvidia might be a buy for long-term investors, but retirees may want to exercise caution--especially if you intend to hold the stock in a portfolio that you need to tap for living expenses.

Write to Elizabeth O'Brien at elizabeth.obrien@barrons.com

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April 19, 2025 13:18 ET (17:18 GMT)

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