What Trump’s Tariffs Mean for Your Investments — and Why Staying the Course Still Wins

OK, I’ve renaged. I was determined to not write another article about the Trump slump again but I’ve had a couple of calls and emails today so I thought I ought to. I didn’t want to send something out for 3 reasons

Everyone and his dog are writing about it so what else can I add?
I don’t want to be a doomsday writer
You know exactly what I’m going to say anyway….don’t panic, think long term, don’t try to time the markets…blah blah blah.

Anyway, here’s the briefest of low downs…

President Trump’s has imposed new tariffs — potentially as high as 60% on Chinese goods. Markets don’t tend to love that kind of news.

Tariffs create uncertainty for businesses, disrupt global trade, and can lead to higher costs for consumers and companies alike.

When uncertainty rises, markets wobble. Investors get nervous. And the knee-jerk reaction is often to sell first and ask questions later.

But before you reach for the panic button, let me explain WHY I tell you to do nothing – by looking at what history tells us.

Staying Calm in a Storm – Lessons from 2008

For those of you that can remember the Global Financial Crisis in 2008 – it felt like the end of the world at the time. Markets tanked, and panic set in. But three different approaches during that period paint a clear picture. Take a look at the image below where SEI assessed what happened to 3 different investors with £10,000 invested in a portfolio split between 65% stocks and 35% bonds. One stayed the course, one sold out and bought back in again a year later, and one sold his investment and stayed in cash.

Investor A stayed invested from October 2007 through to October 2010. Despite the stomach-churning drops, their £10,000 grew to £11,526.

Investor B pulled out at the worst moment in March 2009 and waited a year before reinvesting. Their final value: £9,018.

Investor C cashed out and stayed out, sitting in cash until October 2010. Their portfolio ended up at just £8,250.

That’s over £3,000 difference — all because of how each person responded to the downturn.

Now lets look at similar data going back to the Covid drop in 2020…

Let’s say you invested £10,000 in a balanced portfolio (65% stocks / 35% bonds) at the peak in February 2020, right before the COVID crash. Markets plummeted rapidly — faster than during 2008 — but the recovery was also record-breaking.

We’ll again look at three investors:

Investor A – Stayed Invested

Bought in at the February 2020 high. Rode the COVID crash (market dropped over 30% in just over a month).
Stayed invested throughout until, say, February 2023 (3 years later).
Estimated value: Around £13,000–£14,000, depending on the specific portfolio mix and geography.

Investor B – Sold at the Bottom, Bought Back 1 Year Later

Sold out at the low point in March 2020 when markets were down 30%.
Stayed in cash for a year and reinvested in March 2021.
Missed the bulk of the rebound (which began almost immediately).
Estimated value: Around £10,500–£11,000 by February 2023.

Investor C – Sold and Stayed in Cash Until Feb 2023

Exited at the March 2020 low.
Stayed out of the market until February 2023.
Kept funds in low-interest cash.
Estimated value: Around £9,000–£9,500, factoring in minimal cash returns.

What This Tells Us

Just like the Global Financial Crisis, the post-COVID crash and rebound taught us a powerful lesson: markets recover — often faster than we expect — and sitting on the side lines can cost you dearly.

From March 23, 2020 (market low) to the end of 2020 alone, the S&P 500 rose over 70%. Even conservative portfolios saw a sharp rebound.

And just like in the earlier chart, if you missed even a few of those rebound days? You’d have missed a significant chunk of long-term returns.

Why You Don’t Want to Miss the Best Days

Now here’s something even more eye-opening from the second chart in the report. It shows how devastating it can be to miss just a handful of the market’s best days — and here’s the kicker: those days often come right after the worst ones.

If you invested £10,000 into global markets in 2000 and stayed fully invested through to 2024, you’d now have £45,761. Not bad, right?

But…as the image shows above…

Miss the 10 best days? You’d only have £30,252.
Miss the 20 best days? You’re down to £24,255.
Miss the 40 best days? That’s just £15,509 — almost two-thirds less than if you’d stayed put.

Markets tend to rebound sharply after downturns. But if you’re sitting on the sidelines — even for a short while — you could miss the entire bounce.

Conclusion

So what’s the takeaway? It’s not timing the market — it’s time in the market that makes the biggest difference.

Panic selling locks in losses.
Rebounds often start before you feel “comfortable” re-entering.
Missing the market’s best days = missing the bulk of the growth.

Final Thought: Volatility Is the Price We Pay for Long-Term Growth

There’s no sugar-coating it: investing comes with ups and downs. Big headlines like Trump’s tariffs or global financial crises can make you question everything. But history shows that those who remain patient, stay invested, and ignore the noise are often the ones who come out ahead.

So the next time markets dip, remember: the best days often follow the worst. And the cost of missing them could be far greater than riding out the storm.

As usual…hope this helps?

Brian