Should You Pull Out of a Crashing Market? Vivian Tu Says No — Do This Instead
Written by
Laura Bogart
Edited by
Kristen Mae
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When it comes to investment advice these days, many of the financial “experts” who take to TikTok or other social media channels sound a lot like chicken little. As they scrutinize the market and track the moves of financial titans like Warren Buffett, they become convinced that a crash is imminent.
Well, Vivian Tu, the entrepreneur behind Your Rich BFF, isn’t so sure. And she doesn’t like the tone many of these so-called experts take when “advising” people to potentially pull their money out of the stock market — especially one creator who referred to investors as “idiotic, low-IQ Americans.” Tu promised she could offer better advice, and that she could do it without insulting people.
Instead of making a whiplash decision to pull everything out of a hypothetically crashing market, there are some more moderate money moves Tu would like you to make instead.
Put Everything in Context
The doomsayer Tu called out cited Warren Buffett’s recent sale of roughly $45 million in S&P 500 ETFs as a sign of an impending crash. Yes, that amount sounds pretty dramatic — but Tu wants you to put it into perspective: “That is a teensy-weensy fraction of what Berkshire Hathaway’s holdings are. It’s the same as if you were to invest $1,000 and sell off 15 cents,” she explained.
While Berkshire Hathaway’s cash reserves have nearly doubled — fueling speculation that the company is bracing for a crash — Buffett himself has emphasized that the vast majority of investor dollars remain in equities. Rather than panicking and questioning the intelligence of other investors, people like the creator Tu stitched could have done something much simpler: read Buffett’s own statement to Berkshire Hathaway shareholders. A little research and a lot of context go a long way.
Understand What Actual Experts Are Saying
Instead of putting your faith and your financial security in the hands of an internet rando with no bona fides, focus on the actions and insights of true experts — like Tu, a former Wall Street trader, or Warren Buffett, who is, well, Warren Buffett.
Tu broke down Buffett’s decision as a classic case of “taking profit.”
“Warren Buffett’s no dummy. He knows you can’t be on a rocket ship forever,” she said. “Over the past five years, the S&P 500 has returned nearly 150% — much more than the quoted average 8% to 10% each year. He wanted to lock in those gains.”
Going back to Buffett’s letter to stakeholders, Tu pointed out that Buffett expressed optimism about foreign investments, particularly in Japan. She speculated that he might need the cash from his U.S. sales to fund those international opportunities.
Explore Foreign Investments
Both Buffett and Tu agree: investors may find success by looking beyond the U.S. market. Based on her own analysis, Tu is planning to make some foreign investments as well.
“Smart investors don’t pull out of the market and sit on the sidelines in fear,” she said. “But they do rebalance their portfolios based on their POV.”
They also don’t resort to name-calling.
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