Trump tariffs offer ‘opportunities’ for investors: market strategist

President Donald Trump’s tariffs have redrawn the map of the global economy — sending stocks on an unpredictable ride over the last few months.

On Thursday, many trading partners were hit with “reciprocal” tariffs on their exports to the U.S. Trump also announced late Wednesday that he will impose a 100% tariff on imported semiconductor chips, with an exception for companies that are “building in the United States.”

Most investors would benefit from tuning out the market volatility triggered by a trade war with dozens of countries, financial advisors say. History shows that the stock market is remarkably resilient, and offers handsome returns to those who take a long view.

“Investor uncertainty escalated amid the initial developments of tariffs,” said Wes Crill, senior client solutions director and vice president at Dimensional Fund Advisors.

“[E]ven while the news headlines may be concerning, investors have good reasons to stay invested,” Crill said. “Prices are always set to provide positive expected returns.”

Still, there are also some tactical moves investors can take in this environment if they don’t want to just sit tight and stay the course, market strategists say.

“Tariffs have made this investing environment very tricky,” said Callie Cox, chief market strategist at Ritholtz Wealth Management.

“[But] there are lots of opportunities if you’re willing to look for them.”

Trump has announced and rescinded a flurry of actions around tariff policy since his so-called “Liberation Day” on April 2.

The U.S. effective tariff rate is estimated to rise to about 17% — from 2.3% last year — after tariffs Trump proposed last week on a swath of countries, Stephen Brown, deputy chief North America economist at Capital Economics, wrote in an Aug. 1 research note.

Those so-called “reciprocal tariffs” come on top of others, like duties placed on automobiles, steel, aluminum and copper, for example. A 17% effective rate would be the highest since the 1930s, Brown wrote.

But the stock market is still chugging along. Between the start of April and early August, the S&P 500 rose over 12%, according to Morningstar Direct. As reciprocal tariffs went into effect on Thursday, the market was little changed by midday.

That uptick “reinforces a timeless investing principle,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York.

“Patience often trumps panic,” said Boneparth, a member of the CNBC Financial Advisor Council.

For investors who want to try to allocate their money in a strategic way amid the era of tariffs, exchange-traded funds, or ETFs, may be one place to look, said Andrew Hiesinger, founder and CEO of Quant Data, a market information platform.

“ETFs let investors adjust exposure to entire sectors, regions or supply chains in a single trade,” Hiesinger said.

“When tariffs disrupt global markets, this flexibility can help smooth out risk compared to holding individual stocks that may be directly impacted by a single policy change,” he added.

Many of the best-performing ETFs since early April have been focused on cryptocurrencies, an analysis by Morningstar Direct found.

“Cryptocurrency ETFs have gained momentum because digital assets are not directly impacted by tariffs on physical goods,” Hiesinger said.

“Broader trade uncertainty can also drive investors toward crypto as a perceived hedge against geopolitical and currency risks.”

Meanwhile, nuclear energy ETFs have benefited from a growing demand for stable power sources and policy support, Hiesinger said.

“Tariffs on other energy inputs or technology components can indirectly make nuclear power more attractive,” he added.

There is no single rule for how much of their portfolio investors should allocate to ETFs, Hiesinger said.

“The key is ensuring the position fits within their overall risk tolerance and broader portfolio strategy, rather than a fixed percentage or amount they can afford to lose,” he said.

Among the challenges for investors is the whipsawing nature of the Trump administration’s tariff policy, experts said.

But tactical traders looking to pinpoint investment opportunities over a time frame of weeks or months — compared to the multiyear or multidecade time frames of long-term investors — “shine” in such a fast-moving, volatile environment, Ritholtz Wealth Management’s Cox said.

Technology, consumer discretionary, materials and industrials are among the investment sectors broadly poised for a negative tariff impact, Cox said. The consumer discretionary spending category encompasses retailers that sell good and services such as appliances, toys, electronics and apparel — many of which are manufactured overseas.

Meanwhile, the industrials sector includes transportation and logistics firms such as UPS, FedEx and other shippers that will need to adjust to a new reality of lower import volumes, Cox said.

On the other hand, the Trump administration has exempted many consumer tech products like smart phones and computers from tariffs. That somewhat insulates the tech sector from tariff impact, said Jacob Manoukian, U.S. head of investment strategy at J.P. Morgan Private Bank.

Cox and Manoukian view sectors like utilities and financials as being less exposed to tariffs, as well. These include more services-oriented businesses, which are less focused on physical goods, and are more U.S.-based, Cox said.

“You’re not importing bankers from Europe,” Cox said.

Ultimately, tariffs will have at least some financial impact on “almost everything” because of the interconnected nature of global supply chains, Manoukian said.

But investors should consider their impact alongside other Trump administration policies, Manoukian said.

For example, a recently passed tax and spending package tweaked rules around bonus depreciation and expenses for research and development; changes that are likely to prove financially beneficial for many companies, Manoukian said.