Tariffs & Turmoil: How to Weather the Storm in Volatile Markets

Markets across the globe have taken a sharp turn in recent weeks. Stock markets from Wall Street to the FTSE have fallen dramatically, triggered in large part by President Trump’s announcement of new tariffs on a range of goods. The rhetoric around trade wars has returned with force, and uncertainty now looms over the global economy. Investors are understandably rattled.

We may be witnessing the early stages of a major shift – either a short-lived policy blip that gets rolled back or the dawn of a new era of protectionism and declining free trade. The truth is, no one knows how this will play out in the coming months or years. What we do know, however, is that periods of market turmoil are not new. History tells us that, while downturns can be sharp and unsettling, markets have always recovered – often stronger than before.

So, what should a smart investor do in times like these? The following practical strategies can help you weather the storm, remain focused, and protect your long-term financial wellbeing.

Keep Calm – Market Cycles Are Natural

Volatility is a normal part of investing. Markets do not climb in a straight line, and corrections are often healthy in the long run. Even major downturns – whether caused by policy announcements, political shocks, or pandemics – have historically been followed by recovery. Reacting emotionally to temporary drops is rarely a profitable move. Patience and perspective are your best allies.

Diversify – Your First Line of Defence

It’s been said many times, but it remains essential: diversification matters. A well-balanced portfolio spread across asset classes (equities, bonds, property, cash), industries, and global regions can help smooth out the ride. When one area suffers, another may shine. Don’t put all your eggs in one geopolitical or sectoral basket.

Don’t Just Look Local – Think Globally

While it may feel safer to stick to UK investments, global exposure is critical. The UK economy is heavily influenced by international developments, particularly now. Other regions, such as emerging markets or parts of Asia-Pacific, may have more favourable growth dynamics. A global approach reduces your reliance on any single country’s fortunes.

Quality Over Hype – Stick with the Strong

When markets get jittery, high-quality companies with strong balance sheets, reliable earnings, and defensible business models tend to hold up best. These are often the firms that continue paying dividends and weather economic headwinds better than most. Avoid chasing hot tips and speculative plays – especially now.

Beware of Overexposure – Don’t Double Down on Risk

It’s easy to end up too heavily invested in one particular sector or region without realising it. Now is a good time to assess your exposure. Are you too reliant on tech stocks? Too focused on property or financials? Sectors like healthcare, utilities, and consumer staples tend to be more resilient in downturns. Spreading your risk is key.

Resist the Lure of Cash – Inflation Is the Silent Thief

Selling out and sitting in cash may feel safe, but over time, inflation erodes its value. While cash has a role in any portfolio, going all-in could mean locking in losses and missing the eventual market rebound. Remember: some of the best days in the market often follow the worst.

Look Beyond the Headlines – Data Lags Reality

Economic data tends to be backward-looking. By the time a recession is officially declared, markets have often priced in the bad news already. Similarly, by the time headlines start to look optimistic again, much of the rebound has already occurred. Don’t let the news dictate your investment decisions – look ahead, not behind.

Invest with Purpose – Long-Term Thinking Wins

If your investment strategy is built around your goals, timeframes, and risk tolerance, there’s no need to panic when markets wobble. Recessions, corrections, and shocks will come and go. But staying invested with a long-term mindset is how real wealth is built.

Make a Plan and Update It Regularly

A strong financial plan is your anchor in uncertain times. It gives structure to your goals, aligns your investments with your timeframes and risk tolerance, and helps you stay focused when markets get choppy. But no plan should be static. As your circumstances, priorities, and the world around you change, your plan should evolve too. Regular check-ins ensure you stay on course, adapt sensibly, and make decisions based on your long-term objectives – not short-term noise.

Rebalance and Review – Don’t “Set and Forget”

Tough markets are a good reminder to check your portfolio’s alignment. Has your equity weighting become too high (or too low)? Are you still on track to meet your objectives? Rebalancing helps you stay disciplined and avoid chasing trends or running into unintended risks.

How NorthStar Can Help

At NorthStar, we help our clients put all of these principles into practice. We work closely with each client to build a robust financial plan tailored to their circumstances, setting clear goals and mapping out a strategy to help them achieve what matters most. These plans aren’t static – they’re reviewed regularly to ensure they remain aligned as needs, priorities, and market conditions evolve. We recommend investment solutions that are matched to the right level of risk, broadly diversified, and carefully monitored to deliver strong, consistent returns over time. Through all market conditions, our focus is on helping our clients stay on track and feel confident about their long-term financial wellbeing.

Stay Informed – But Don’t Overconsume the Noise

Staying informed is important, but drowning in headlines and market updates can create unnecessary anxiety. Choose a few trusted sources, stay updated at a reasonable level, and avoid knee-jerk reactions. Your future self will thank you.

In Summary: Ride the Storm – Recovery Always Follows

We are undoubtedly in a period of heightened uncertainty. President Trump’s tariff moves have spooked markets, and global investors are grappling with the possibility of prolonged trade wars and protectionism. But as with all market crises, this too shall pass.

History teaches us that markets recover and rise again, recessions end, and new opportunities arise. By staying calm, avoiding panic selling, and maintaining a long-term view, you give your investments the best chance to succeed.

There’s wisdom in doing nothing – provided you’ve already done the smart things. Build a robust portfolio. Diversify intelligently. Review regularly. And above all, trust in the resilience of markets and the power of time.

If you would like to talk about any of the issues in this article or need more general help with your finances, please get in touch with us.

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