NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Thu, 17 Apr 2025
Learn how to stay calm during market volatility and whether a HELOC or cash-out refi makes sense for your home reno goals. What should you do with your investments when the stock market is particularly volatile? What’s the difference between a HELOC and a cash-out refinance? Hosts Sean Pyles and Elizabeth Ayoola discuss coping with market volatility as well as borrowing against home equity to help you understand how to navigate uncertainty and also make smart decisions about home renovations. First, NerdWallet senior news writer Anna Helhoski and investing writer Sam Taube offer different strategies for approaching recent market volatility, including tips for ignoring short-term investment noise, building financial resilience, and understanding how tariffs affect the economy. Then, NerdWallet mortgage writer Kate Wood joins Sean and Elizabeth to discuss how to borrow against your home’s value. They discuss the pros and cons of home equity lines of credit (HELOCs) and cash-out refinances, how to evaluate which option may suit your renovation goals, and strategies to avoid financial regret down the road. NerdWallet’s free HELOC calculator can help you figure out whether you could be eligible for a home equity line of credit—and how much you might be able to borrow: https://www.nerdwallet.com/article/mortgages/heloc-calculator In their conversation, the Nerds discuss: stock market volatility, what to do when the stock market drops, HELOC vs cash-out refinance, home equity loan pros and cons, how to fund home renovations, building financial resilience, emergency fund tips, tariffs and the stock market, inflation and investments, Fed interest rate policy, bear market meaning, market downturn tips, investing during volatility, how tariffs affect the economy, bond ladder strategy, best time for HELOC, home equity loan risks, saving for home renovation, California home prices, budgeting for renovations, mortgage and equity options, financial impact of home improvements, refinance or HELOC for renovations, Vanguard FTSE All-World Ex-US ETF, iShares Core U.S. Aggregate Bond ETF, international stocks vs US stocks, when to use a cash-out refinance, credit card debt vs investing, student loans and home equity, home improvement timeline planning, setting renovation budgets, housing equity strategies, planning for college savings, market correction vs crash, coping with investment stress, and financial planning in uncertain times. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What coping strategies can help during market volatility?
Ah, perfect.
Yep. With regard to tariffs, the uncertainty is a big part of why markets are whipsawing up and down so dramatically over the last month. No one really knows how far tariffs will go or when we've arrived at the final tariff program. Things keep changing.
For example, the Mexico and Canada tariffs were announced, and then they were delayed, and then they were implemented, and then they were partially scaled back.
All right, fine. Since we can't look into the future, let's do a little bit of an explainer instead. Can you talk to us about why stock markets worldwide freaked out in the wake of the tariff announcements?
Tariffs are taxes on imports, and we import quite a lot of stuff. They may raise production costs for businesses, which would be bad for the stock market because it would hurt corporate earnings. But tariffs may also be passed on to consumers in the form of higher prices. In other words, they could juice inflation.
That would be unfortunate in its own right, and it could also complicate the Federal Reserve's plans to lower interest rates, which is something the stock market has kind of been counting on for a while now.
Sam, can you give us some perspective on just how manic this market is right now? Is it 2008 financial crisis wild or 2020 pandemic wild?
This might not age well, depending on when people are listening to this episode, but this tariff volatility so far isn't nearly as bad as either of those things, at least not yet. 2008 and 2020 both saw severe bear markets in all the major stock indexes. And for reference, a bear market is when an index falls 20% or more from a recent high.
For now, the NASDAQ is in bear market territory, but the S&P 500 and the Dow Jones Industrial Average haven't gotten there yet.
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Chapter 2: What are the pros and cons of home equity loans?
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All right, let's get to this episode's money question segment. That's up next. Stay with us.
We're back and answering your money questions to help you make smarter financial decisions. Now, this episode, we're joined by Irene, a listener with some questions about the pros and cons of home equity borrowing and the best way to fund home improvements. Welcome to Smart Money, Irene. Hi, I'm so happy to be here. We're excited. It's going to be a great chat.
And I'm also joined by NerdWallet Mortgage's writer, Kate Wood, to help me answer Irene's questions. Welcome back to Smart Money, Kate. Thank you so much for having me back. Let's get the conversation started. So we're going to start with a little icebreaker for you, Irene. Now, if you had to describe your current financial situation in one word, what would it be and why? Okay.
Um, I'm going to say growing just because not necessarily that our, I mean, our money hopefully is growing, but I have been growing a lot in just the education of our finances. A lot of that is thanks to y'all's podcast. It's been incredibly helpful and just teaching me really some financial basics that I've never learned before.
And so my husband and I have just kind of been on this financial journey trying to grow in our finances. knowledge of what our money is doing and how to make it work for us. I listened to the episode on what is a recession and things like that, just overall money concepts too.
Oh, I love that. And because finances are a journey, I think you're always growing. So it sounds like you're in a good spot.
Yeah.
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