Business
How Some Investors Are Protecting Their Money Amid Stock Market Woes
After the dot-com bubble burst in the early 2000s, Lars Staack decided to play it safe and invest his retirement savings in S&P 500 index funds, which are diversified and carry lower risk than owning individual stocks.
It was a strategy that brought him peace of mind for more than two decades — until President Trump was elected in November. As he reviewed Mr. Trump’s comments in support of sweeping tariffs, Mr. Staack, 62, who retired two years ago, became increasingly uneasy about the savings he planned to use for the rest of his retirement.
Those nerves about how Mr. Trump’s economic policies might affect the stock market led him to start selling his index funds in January, moving them into bond and Treasury funds, which are seen as safe havens in times of volatility. About a third of his savings are still in stocks. The daily swings this past week, which included the market’s worst single day in months, have made him consider moving even more of his assets into safer bonds, he said.
“I’m fumbling about, trying to figure out what is going to be the best way to preserve my retirement savings from a volatile economy, and from upcoming inflation,” Mr. Staack said.
Many financial advisers are reiterating their usual advice during moments of angst: Do nothing and stay the course, assuming your financial plan is diversified and aligned with your goals. But the tumultuous rounds of trading have jolted people like Mr. Staack, who has an immediate need for his investments. The way he sees it, stock market index funds are no longer safe for people close to or in retirement — people who intend to use their assets in the near future and do not have the luxury of time to wait for the market to reverse course.
“What Trump and Musk have done is unprecedented, so it seems like nothing is safe anymore,” Mr. Staack said. He lives in Poway, Calif., outside San Diego, and was a Republican voter until 2016, when he started voting for Democrats.
Over the past few weeks, Wall Street has become increasingly pessimistic about whipsawing policies from Washington. By Thursday, the S&P 500 index had tumbled 10.1 percent from a peak that it had reached less than one month before, a sell-off fueled by investors’ fears that trade wars and mass layoffs of federal employees could prompt an economic slowdown. The S&P 500 correction underscored how the two-year-long bull market is running out of steam in the early days of the Trump administration.
Policy and politics have been the key driver of concern among clients, financial advisers said. But not everyone is taking action. In fact, advisers at some of the biggest wealth management firms said their clients were, for the most part, sticking with their existing financial plans.
Most of the roughly seven million investors on the Vanguard brokerage platform have “stayed disciplined,” in line with their behavior during market downturns in the past, said James Martielli, Vanguard’s head of investment and trading services. On Monday, when Wall Street suffered its steepest decline of the year, only 2.5 percent of Vanguard’s clients placed trades, and the majority of those trades were to buy equities, rather than sell them, Mr. Martielli said.
“Most clients right now are a little bit dazed, but still relatively comfortable where they’re at and where things are going,” said Mark Mirsberger, the chief executive of Dana Investment Advisors, which manages about $8.5 billion for institutions and individuals.
In conversations with clients, it is often retirees, and those closing in on retirement, who are paying the closest attention to the stock market and expressing nervousness, said Rob Williams, the managing director of financial planning and wealth management at Charles Schwab. The question, he said, is how they respond.
For people closer to retirement, “taking some risk off the table” might make sense, but when politics becomes a factor in decisions, which seems to be happening more, Mr. Williams said, he urges clients to stick to their plans and “not respond emotionally.”
Siegfried Lodwig is more than a decade into his retirement, and the recent volatility has not changed his mind about keeping about half of his savings in the stock market, managed by a financial services firm. He said he trusted that the market would bounce back, as it always had.
Still, Mr. Lodwig, 80, said he planned to leave his estate to Amherst College, where years ago he received a scholarship. He said he had some concern about how much would be left for the school if the market continued to fall in the short term.
Andy Smith, the executive director of financial planning at Edelman Financial Engines, is cautioning his clients not to overreact to news headlines about Wall Street’s jitters. Those with diversified portfolios and enough cash on hand for their short-term needs are able to calm their nerves with greater ease, he said.
“In times of volatility, everybody gets uneasy,” said Heather Knight, a national brokerage coach at Fidelity Investments. “Stay the course — that’s the best way to weather through some of those periods of volatility.”
But for some Americans — especially those who anticipate needing access to their savings in the near future — the current economic unease feels different from market dips they have experienced in the past, prompting them to rethink their investments.
Praisely McNamara, a single mother whose 16-year-old son is a junior in high school, decided in February to withdraw half of her 401(k), the maximum amount she could, despite having to pay thousands in tax penalties to do so. Employed in health care sales, she is still contributing to a Vanguard index fund. But with mortgage and college tuition payments on the horizon, the economic instability spurred by Mr. Trump’s policies was enough for her to feel that she needed cash on hand.
As someone without a stockpile of savings, Ms. McNamara, of Newington, Conn., said uncertainty about trade wars and the outlook for the U.S. job market had fueled her decision.
“This is absolutely the first time that I have felt in any way like I’m not secure in what I’ve been told is the most secure way to prepare for retirement,” said Ms. McNamara, 40, who voted for former Vice President Kamala Harris.
The volatility has rattled even Americans who do not expect to use their savings in the near future.
Alison Greenlaw, 43, is still a couple of decades away from retiring. She and her husband bought their home in Bloomfield, Conn., a few years ago. (Ms. Greenlaw knows Ms. McNamara through a community organization.) Until three weeks ago, her 401(k) was in a Vanguard target date retirement fund, which had a pre-mixed blend of stocks and other holdings based on the assumption that she would retire around 2045.
But as economic concerns started to creep into the stock market in February, she decided to move all of her 401(k) savings into a Vanguard money market fund, which has lower-risk investments like government-backed securities.
“I know I won’t make any money there, but I’m not freaking out like everyone whose 401(k) is losing money every day,” Ms. Greenlaw said. “I’m feeling glad that I did what I did,” she added, pointing to the market’s tariff-induced swings this past week.
Ms. Greenlaw tried to make an informed decision by talking to people who work in finance and whose opinions she respects. Many of them advised her not to do anything. But she said she was not comfortable taking the traditional wait-and-see approach. She said she felt that the level of uncertainty in the United States right now was “existential.”
On Tuesday, Stephen Dinan, 55, whose children are 5 and 7 years old, moved their 529 college savings accounts from U.S. stocks and stock index funds into bonds and an international equities index fund. He also moved his 401(k), along with his wife’s, into bonds.
Mr. Trump’s unpredictable and aggressive approach to policy has stoked Mr. Dinan’s worries about instability in the stock market. A Democratic voter, he said he hoped to move his savings back into stocks when the economic outlook cleared, or when there was a change in administration down the line.
Financial experts are “focused on things that are moving within the game as it’s played,” he said. “But they’re not planning for if the board game itself is taken out from under.”
Businessman Brian Kahn has pleaded guilty to conspiracy to commit securities fraud in a case that brought down a hedge fund, helped lead to the bankruptcy of a retailer and damaged West Los Angeles investment bank B. Riley Financial.
Kahn, 52, admitted in a Trenton, N.J., federal court Wednesday to hiding trading losses that brought down Prophecy Asset Management in 2020. The Securities and Exchange Commission alleged the losses exceeded $400 million.
An investor lawsuit has accused Kahn of funneling some of the fund’s money to Franchise Group, a Delaware retail holding company assembled by the investor that owned Vitamin Shoppe, Pet Supplies Plus and other chains.
B. Riley provided $600 million through debt it raised to finance a $2.8-billion management buyout led by Kahn in 2023. It also took a 31% stake in the company and lent Kahn’s investment fund $201 million, largely secured with shares of Franchise Group.
Kahn had done deals with B. Riley co-founder Bryant Riley before partnering with the L.A. businessman on Franchise Group.
However, the buyout didn’t work out amid fallout from the hedge fund scandal and slowing sales at the retailers. Franchise Group filed for bankruptcy in November 2024. A slimmed-down version of the company emerged from Chapter 11 in June.
B. Riley has disclosed in regulatory filings that the firm and Riley have received SEC subpoenas regarding its dealings with Kahn, Franchise group and other matters.
Riley, 58, the firm’s chairman and co-chief executive, has denied knowledge of wrongdoing, and an outside law firm reached the same conclusion.
The failed deal led to huge losses at the financial services firm that pummeled B. Riley’s stock, which had approached $90 in 2021. Shares were trading Friday at $3.98.
The company has marked down its Franchise Group investment, and has spent the last year or so paring debt through refinancing, selling off parts of its business and other steps, including closing offices.
The company announced last month it is changing its name to BRC Group Holdings in January. It did not immediately respond to requests for comment.
At Wednesday’s plea hearing, Assistant U.S. Atty. Kelly Lyons said that Kahn conspired to “defraud dozens of investors who had invested approximately $360 million” through “lies, deception, misleading statements and material omissions.”
U.S. District Judge Michael Shipp released Kahn on a $100,000 bond and set an April 2 sentencing date. He faces up to five years in prison. Kahn, his lawyer and Lyons declined to comment after the hearing.
Kahn is the third Prophecy official charged over the hedge fund’s collapse. Two other executives, John Hughes and Jeffrey Spotts, have also been charged.
Hughes pleaded guilty and is cooperating with prosecutors. Spotts pleaded not guilty and faces trial next year. The two men and Kahn also have been sued by the SEC over the Prophecy collapse.
Bloomberg News contributed to this report.
Chatty bots are sharing their hot takes through hundreds of thousands of AI-generated podcasts. And the invasion has just begun.
Though their banter can be a bit banal, the AI podcasters’ confidence and research are now arguably better than most people’s.
“We’ve just begun to cross the threshold of voice AI being pretty much indistinguishable from human,” said Alan Cowen, chief executive of Hume AI, a startup specializing in voice technology. “We’re seeing creators use it in all kinds of ways.”
AI can make podcasts sound better and cost less, industry insiders say, but the growing swarm of new competitors entering an already crowded market is disrupting the industry.
Some podcasters are pushing back, requesting restrictions. Others are already cloning their voices and handing over their podcasts to AI bots.
Popular podcast host Steven Bartlett has used an AI clone to launch a new kind of content aimed at the 13 million followers of his podcast “Diary of a CEO.” On YouTube, his clone narrates “100 CEOs With Steven Bartlett,” which adds AI-generated animation to Bartlett’s cloned voice to tell the life stories of entrepreneurs such as Steve Jobs and Richard Branson.
Erica Mandy, the Redondo Beach-based host of the daily news podcast called “The Newsworthy,” let an AI voice fill in for her earlier this year after she lost her voice from laryngitis and her backup host bailed out.
She fed her script into a text-to-speech model and selected a female AI voice from ElevenLabs to speak for her.
“I still recorded the show with my very hoarse voice, but then put the AI voice over that, telling the audience from the very beginning, I’m sick,” Mandy said.
Mandy had previously used ElevenLabs for its voice isolation feature, which uses AI to remove ambient noise from interviews.
Her chatbot host elicited mixed responses from listeners. Some asked if she was OK. One fan said she should never do it again. Most weren’t sure what to think.
“A lot of people were like, ‘That was weird,’” Mandy said.
In podcasting, many listeners feel strong bonds to hosts they listen to regularly. The slow encroachment of AI voices for one-off episodes, canned ad reads, sentence replacement in postproduction or translation into multiple languages has sparked anger as well as curiosity from both creators and consumers of the content.
Augmenting or replacing host reads with AI is perceived by many as a breach of trust and as trivializing the human connection listeners have with hosts, said Megan Lazovick, vice president of Edison Research, a podcast research company.
Jason Saldanha of PRX, a podcast network that represents human creators such as Ezra Klein, said the tsunami of AI podcasts won’t attract premium ad rates.
“Adding more podcasts in a tyranny of choice environment is not great,” he said. “I’m not interested in devaluing premium.”
Still, platforms such as YouTube and Spotify have introduced features for creators to clone their voice and translate their content into multiple languages to increase reach and revenue. A new generation of voice cloning companies, many with operations in California, offers better emotion, tone, pacing and overall voice quality.
Hume AI, which is based in New York but has a big research team in California, raised $50 million last year and has tens of thousands of creators using its software to generate audiobooks, podcasts, films, voice-overs for videos and dialogue generation in video games.
“We focus our platform on being able to edit content so that you can take in postproduction an existing podcast and regenerate a sentence in the same voice, with the same prosody or emotional intonation using instant cloning,” said company CEO Cowen.
Some are using the tech to carpet-bomb the market with content.
Los Angeles podcasting studio Inception Point AI has produced its 200,000 podcast episodes, accounting for 1% of all podcasts published on the internet, according to CEO Jeanine Wright.
The podcasts are so cheap to make that they can focus on tiny topics, like local weather, small sports teams, gardening and other niche subjects.
Instead of a studio searching for a specific “hit” podcast idea, it takes just $1 to produce an episode so that they can be profitable with just 25 people listening.
“That means most of the stuff that we make, we have really an unlimited amount of experimentation and creative freedom for what we want to do,” Wright said.
One of its popular synthetic hosts is Vivian Steele, an AI celebrity gossip columnist with a sassy voice and a sharp tongue. “I am indeed AI-powered — which means I’ve got receipts older than your grandmother’s jewelry box, and a memory sharper than a stiletto heel on marble. No forgetting, no forgiving, and definitely no filter,” the AI discloses itself at the start of the podcast.
“We’ve kind of molded her more towards what the audience wants,” said Katie Brown, chief content officer at Inception Point, who helps design the personalities of the AI podcasters.
Inception Point has built a roster of more than 100 AI personalities whose characteristics, voices and likenesses are crafted for podcast audiences. Its AI hosts include Clare Delish, a cooking guidance expert, and garden enthusiast Nigel Thistledown.
The technology also makes it easy to get podcasts up quickly. Inception has found some success with flash biographies posted promptly in connection to people in the news. It uses AI software to spot a trending personality and create two episodes, complete with promo art and a trailer.
When Charlie Kirk was shot, its AI immediately created two shows called “Charlie Kirk Death” and “Charlie Kirk Manhunt” as a part of the biography series.
“We were able to create all of that content, each with different angles, pulling from different news sources, and we were able to get that content up within an hour,” Wright said.
Speed is key when it comes to breaking news, so its AI podcasts reached the top of some charts.
“Our content was coming up, really dominating the list of what people were searching for,” she said.
Across Apple and Spotify, Inception Point podcasts have now garnered 400,000 subscribers.
Los Angeles County is suing four oil and gas companies for allegedly failing to plug idle oil wells in the large Inglewood Oil Field near Baldwin Hills.
The lawsuit filed Wednesday in Los Angeles Superior Court charges Sentinel Peak Resources California, Freeport-McMoran Oil & Gas, Plains Resources and Chevron U.S.A. with failing to properly clean up at least 227 idle and exhausted wells in the oil field. The wells “continue to leak toxic pollutants into the air, land, and water and present unacceptable dangers to human health, safety, and the environment,” the complaint says.
The lawsuit aims to force the operators to address dangers posed by the unplugged wells. More than a million people live within five miles of the Inglewood oil field.
“We are making it clear to these oil companies that Los Angeles County is done waiting and that we remain unwavering in our commitment to protect residents from the harmful impacts of oil drilling,” said Supervisor Holly Mitchell, whose district includes the oil field, in a statement. “Plugging idle oil and gas wells — so they no longer emit toxins into communities that have been on the front lines of environmental injustice for generations — is not only the right thing to do, it’s the law.”
Sentinel is the oil field’s current operator, while Freeport-McMoran Oil & Gas, Plains Resources and Chevron U.S.A. were past operators. Energy companies often temporarily stop pumping from a well and leave it idle waiting for market conditions to improve.
In a statement, a representative for Sentinel Peak said the company is aware of the lawsuit and that the “claims are entirely without merit.”
“This suit appears to be an attempt to generate sensationalized publicity rather than adjudicate a legitimate legal matter,” general counsel Erin Gleaton said in an email. “We have full confidence in our position, supported by the facts and our record of regulatory compliance.”
Chevron said it does not comment on pending legal matters. The others did not immediately respond to a request for comment.
State regulations define “idle wells” as wells that have not produced oil or natural gas for 24 consecutive months, and “exhausted wells” as those that yield an average daily production of two barrels of oil or less. California is home to thousands of such wells, according to the California Department of Conservation.
Idle and exhausted wells can continue to emit hazardous air pollutants such as benzene, as well as a methane, a planet-warming greenhouse gas. Unplugged wells can also leak oil, benzene, chloride, heavy metals and arsenic into groundwater.
Plugging idle and exhausted wells includes removing surface valves and piping, pumping large amounts of cement down the hole and reclaiming the surrounding ground. The process can be expensive, averaging an estimated $923,200 per well in Los Angeles County, according to the California Geologic Energy Management Division, which notes that the costs could fall to taxpayers if the defendants do not take action. This 2023 estimate from CalGEM is about three times higher than other parts of the state due to the complexity of sealing wells and remediating the surface in densely populated urban areas.
The suit seeks a court order requiring the wells to be properly plugged, as well as abatement for the harms caused by their pollution. It seeks civil penalties of up to $2,500 per day for each well that is in violation of the law.
Residents living near oil fields have long reported adverse health impacts such as respiratory, reproductive and cardiovascular issues. In Los Angeles, many of these risks disproportionately affect low-income communities and communities of color.
“The goal of this lawsuit is to force these oil companies to clean up their mess and stop business practices that disproportionately impact people of color living near these oil wells,” County Counsel Dawyn Harrison said in a statement. “My office is determined to achieve environmental justice for communities impacted by these oil wells and to prevent taxpayers from being stuck with a huge cleanup bill.”
The lawsuit is part of L.A. County’s larger effort to phase out oil drilling, including a high-profile ordinance that sought to ban new oil wells and even require existing ones to stop production within 20 years. Oil companies successfully challenged it and it was blocked in 2024.
Rita Kampalath, the county’s chief sustainability officer, said the county remains “dedicated to moving toward a fossil fuel-free L.A. County.”
“This lawsuit demonstrates the County’s commitment to realizing our sustainability goals by addressing the impacts of the fossil fuel industry on front line communities and the environment,” Kampalath said.
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