BLOOD IN THE STREETS and STAYING OUT OF HARM’S WAY. How to invest and increase your wealth in the days of the "Trump Tariffs".

 

BLOOD IN THE STREETS. STAYING OUT OF HARM’S WAY.
How to Invest and Increase Your Wealth in the Days of the Trump Tariffs

By Steven Orlowski, CFP, CNPR

There’s a saying in investing often attributed to Baron Rothschild: “Buy when there’s blood in the streets, even if the blood is your own.” The phrase captures the essence of contrarian investing—seeing opportunity where others see panic. And with the reimposition of steep tariffs under a Trump administration, the current environment may feel like a battlefield for both investors and business owners alike.

Whether or not you support tariff policy, the practical impact is undeniable: market volatility, higher costs of goods, and a reshuffling of global supply chains. So how should a prudent investor respond? Not with fear—but with strategy.

1. Understand Where the Blood Is Flowing

Tariffs disrupt global trade, plain and simple. That means industries reliant on imports and exports—automotive, technology, consumer electronics, and agriculture—tend to be hit first and hardest. But not all companies are affected equally.

Look under the hood of your portfolio. Are you overly exposed to multinational firms with deep supply chains in tariff-affected regions? If so, consider rebalancing toward businesses that are:

• Domestic-focused

• Vertically integrated (i.e., control more of their supply chain)

• Less dependent on foreign materials or markets

2. Find the Silver Linings

Tariff wars tend to benefit certain industries:

• Domestic manufacturing and materials: Steel, aluminum, and machinery producers often see demand rise as tariffs make imported alternatives more expensive.

• Small-cap U.S. companies: Smaller companies tend to be more domestically focused and less exposed to international trade tensions.

• Defense and infrastructure: As governments respond with stimulus or military build-ups, companies in these sectors can enjoy a boost.

These sectors could offer growth even as the broader market trembles.

3. Play Defense to Stay in the Game

Capital preservation is key during turbulent times. Investors may want to shift a portion of their portfolios into:

• Dividend-paying stocks: These can offer income while riding out volatility.

• Consumer staples and utilities: These sectors tend to be more resilient when consumers tighten their belts.

• Gold and other hard assets: These traditional hedges often benefit when currencies are under pressure and uncertainty reigns.

A strategic cash position also gives you the firepower to scoop up bargains when the panic hits a peak.

4. Think Globally—But Tread Carefully

Not every international market is a victim of U.S. tariffs. Some may even benefit from new trade partnerships or shifts in global supply chains.

• Look to emerging markets with growing middle classes and low debt-to-GDP ratios.

• Consider non-U.S. trade blocs gaining strength, such as the EU or ASEAN.

But be selective. Avoid economies heavily reliant on exports to the U.S. or those directly retaliating in a tariff war.

5. Get Tactical With Tax and Timing

Tariffs can cause short-term dips that create long-term buying opportunities. That’s where tools like tax-loss harvesting or dollar-cost averaging come into play.

• Tax-loss harvesting: Sell losing positions to offset gains elsewhere.

• Dollar-cost averaging: Regularly invest fixed amounts, so you're not trying to time the market at its peak or bottom.

These methods help keep emotions in check and your plan on track.

6. Work with a Fiduciary Advisor

Now more than ever, professional guidance can be a game changer. A Certified Financial Planner (CFP®) or Registered Investment Advisor (RIA) can help you:

• Stress test your financial plan against different tariff and inflation scenarios.

• Rebalance for both risk and opportunity.

• Avoid common behavioral traps that derail long-term success.

Final Thoughts

Markets hate uncertainty—but they love adaptation. Investors who stay calm, stay diversified, and stay focused on fundamentals will not just survive the era of tariffs—they’ll find ways to thrive.

The blood may be in the streets, but it doesn’t have to be yours.