Investors may feel an impulse to move to cash amid the recent tumult in the stock market. While cash might feel safer than stocks, it can also pose risks for long-term savers, financial advisors say.

Cash — like money held in a high-yield bank savings account or a money market fund — is substantially less volatile than stocks over the short term, experts said.

But cash has historically delivered lower returns than stocks over the long term. Holding on to more cash than you need — rather than investing it — raises the risk that you may not achieve your investing goals.

The upshot: Cash-heavy investors may find it challenging to achieve their long-term investment goals, and may have to save more of their discretionary income as a result, Vanguard wrote in a paper that analyzed stock and cash returns.

Investors fled stocks for perceived safe havens as U.S. stock benchmarks were whipsawed by tariff and trade proclamations from the Trump administration and retaliatory measures announced by major trade partners like China.

Following a White House announcement of country-specific tariffs earlier this month, the S&P 500 had its worst two-day stretch since the early days of the Covid-19 pandemic, losing about 11%.

Meanwhile, April 7 saw the highest volume of 401(k) plan trading since March 12, 2020, according to Alight Solutions, a retirement plan administrator. About 94% of proceeds moved to conservative assets like money market, bond and stable-value funds, according to Alight.

“Everyone should have some cash and some equities,” McClanahan, a member of CNBC’s Financial Advisor Council, wrote in an e-mail.

But cash “has a long history” of offering negative “real” returns, meaning returns after accounting for inflation, according to Morningstar.

In other words, consumers who hold a portfolio that’s 100% in cash actually lose wealth over time after accounting for inflation, experts said. If interest rates on cash don’t keep pace with rising prices, consumers lose purchasing power.

Meanwhile, stocks have the potential for high growth, especially over the long term, but also come with risks, McClanahan said.

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“The ups and downs of the markets can be nauseating, and you might have to bank losses if you need your money and can’t ride out market downturns,” McClanahan said.

“Every portfolio should be diversified across safe and risky assets based on the client’s financial and psychological ability to take risk,” she wrote.

People in or near retirement, when they will need to start withdrawing money from their portfolio, should hold enough money in cash, short-term bonds and certificates of deposit to fund five years of income needs, plus any upcoming major purchases, McClanahan said.

The rest should be in a diversified portfolio of fixed income and stocks, she said.

Even retirees generally need to allocate some of their portfolio to stocks: They may lean on their portfolios to fund their lifestyle over three or more decades, meaning some investment growth is necessary to avoid running out of money, according to experts.

All investors should have an investment strategy that spells out “how much they will have allocated to equities, fixed income [bonds], and cash and they should stick with this investment policy through all markets, good and bad,” McClanahan wrote in an e-mail.

Few consumer products are immune from the impact of new tariffs on goods imported into the United States, but apparel may be among the hardest hit.

A trade war could significantly raise the price of clothing for consumers. Since a large portion of U.S. clothing and shoes are imported, tariffs on those goods would increase the cost for both the importers and, ultimately, the consumer, experts say.

“The 2025 tariffs disproportionately affect clothing and textiles, with consumers facing 64% higher apparel prices in the short-run,” according to forecasts by the Yale University Budget Lab. “Apparel prices will stay 27% higher in the long-run.”

For now, the Trump Administration has opted for a universal tariff rate of 10%. Earlier this month, the White House imposed 145% tariffs on products from China. President Donald Trump recently granted exclusions from steep tariffs on smartphones, computers and some other electronics imported largely from China.

“We are concerned about the escalating trade war with China. Ultimately no one wins,” said Julia Hughes president of the United States Fashion Industry Association.

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“This policy continues to subject U.S. imports of our industry’s largest trading partner to an unsustainable tax,” Steve Lamar, the American Apparel & Footwear Association’s president and CEO, said in a prepared statement. 

Tariffs, particularly on clothing and materials, which are not made at scale in the U.S., will lead to higher prices for consumers and will only fuel inflation, according to the American Apparel & Footwear Association.

The U.S. receives 97% percent of clothing and shoes from other countries, but primarily China and Vietnam, a 2024 report by the American Apparel & Footwear Association found.

As part of the new high tariffs on China, Trump also revoked a popular tax loophole known as de minimis. The exemption allowed many e-commerce companies to send goods worth less than $800 into the U.S. duty-free. The loophole also allowed American shoppers to buy low-cost goods directly from retailers in China and Hong Kong.

Some popular clothing brands, like Shein and Temu imported from China, could face an immediate impact and will likely funnel those extra costs to customers in the way of higher prices, which would hit low- and middle-class Americans particularly hard.

Three-quarters of consumers said they’re already engaging in “trade-down” behavior when purchasing clothing and footwear, according to recent research by Empower.

In the years since high inflation made clothing more expensive, a shift was already starting.

Shoppers downgraded to more affordable second-hand merchandise and embraced buying “dupes” — short for duplicates.

“If you can’t afford Louis Vuitton, you are going to buy Coach. If you can’t afford Coach, you are going to buy the knock off,” said Shawn Grain Carter, an associate professor at the Fashion Institute of Technology, part of the State University of New York.

Historically, trade restrictions drive up the cost of authentic goods, creating the perfect conditions for counterfeiters to flood the market with cheaper, harder-to-detect fakes, according to Vidyuth Srinivasan, co-founder and CEO of Entrupy, an authentication service.

With Trump’s recent executive order eliminating duty-free de minimis treatment for low-value imports, the flow of counterfeit goods will also be more expensive and logistically challenging, Srinivasan explained.

However, “counterfeiters are incredibly agile,” he said. “When one route is blocked, they’ll adapt, seeking alternative distribution channels to continue flooding the market with fakes.”

Alternatively, “there might be a little more of a lean into the second-hand market because it just seems more affordable,” Srinivasan said. 

Faced with higher costs, 67% of consumers plan to change their shopping habits, according to another recent report by Bid-on-Equipment. Among the top strategies, 46% say they will shop at thrift or second-hand stores. Other ways to save include comparison shopping or buying fewer imported goods. The survey polled more than 1,000 adults in January.

In another survey by shopping app Smarty, 50% of respondents said they’re more likely to consider secondhand goods or local alternatives because of tariff-induced price hikes.

“Tariffs are already prompting my customers to even more actively seek alternatives when it comes to luxury designer goods,” said Christos Garkinos, the CEO and founder of online reseller Covet By Christos.

“On the one hand, customers who are looking to make some extra money in this volatile economy are considering selling off parts of their designer collections,” Garkinos said.

“On the flip side, so many of my existing customers are doubling down on resale,” he said, “because they know that there is no tariff to pay and they can still get their hands on luxury goods without paying that extra premium right now.”

The U.S. resale market is experiencing significant growth, with projections indicating it will continue to expand rapidly over the next few years. This growth is being driven by factors like rising consumer preference for second-hand options, especially among younger generations, and the increasing adoption of online resale platforms, experts say.

Re-commerce — which encompasses the buying and selling of pre-owned, refurbished or secondhand goods  — is projected to increase 55%, reaching $291.6 billion by 2029. That would outpace the overall retail market, with resale potentially accounting for 8% of total retail by 2029, according to a 2024 report by OfferUp, an online marketplace for buying and selling new and used items.

Still, there aren’t enough second-hand products to satisfy consumer demand, Hughes said. “The quantities aren’t there.”

For now, the apparel industry must wait and see what will happen with potential trade agreements going forward, just as back-to-school inventory — one of the most important shopping seasons of the year — is set to start shipping, Hughes said.

“The chaos is still rippling through,” she added. “This is a real time of uncertainty.”

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If you’re scrambling to file your taxes, you could miss another key due date on April 15: the first-quarter estimated tax deadline for 2025. 

Typically, quarterly payments apply to income without tax withholdings, such as self-employment earnings, rental income, interest, dividends or gig economy work. Similarly, retirees and investors “frequently need to make these payments,” the IRS said in a news release last week. 

The first quarter deadline for 2025 “could be a surprise” if you’re newly self-employed or recently started contract work, said Misty Erickson, tax content manager at the National Association of Tax Professionals. 

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Those individuals could experience “sticker shock” when it’s time to file 2025 taxes or be subject to future penalties, Erickson said.

Generally, you must make quarterly payments if you expect to owe at least $1,000 for the current tax year, according to the IRS.

The April 15 deadline applies to earnings from Jan. 1 through March 31. The other 2025 quarterly due dates are June 16, Sept. 15 and Jan. 15, 2026.

If you skip one of the payments, you could trigger an interest-based penalty calculated with the current interest rate. The fee compounds daily.

Generally, you can avoid IRS penalties by following the “safe harbor” guidelines, certified public accountant Brian Long, senior tax advisor at Wealth Enhancement in Minneapolis, previously told CNBC. 

To satisfy the safe harbor rule, you must pay at least 90% of your 2025 tax liability or 100% of your 2024 taxes, whichever is smaller.

The threshold jumps to 110% if your 2024 adjusted gross income was $150,000 or more, which you can find on line 11 of Form 1040 from your 2024 tax return.

However, the safe harbor only protects an individual from an IRS underpayment penalty. If you don’t pay enough, you could still owe a balance for 2025, experts say.

You can pay by mail, online via IRS Direct Pay or the Treasury Department’s Electronic Federal Tax Payment System. You can also use a debit card, credit card or digital wallet.  

Your IRS online account “streamlines the payment process” because you can monitor pending transactions, see history and other key tax filing information, according to the agency.

The online account makes it easier to correct mistakes “sooner rather than later,” Erickson said. “I have heard stories of payments being misapplied, so this is a way to double-check.” 

If you mail the payment, experts recommend sending it via certified mail with a return receipt for proof.