Three months into 2025 and its been absolute chaos! Political uncertainty, heightened trade tensions, and President Trump hinting at a possible recession have investors understandably on edge. While recent tariffs on Chinese, Mexican, and Canadian goods have amplified market shakiness (which I covered in detail here), today I want to focus specifically on actionable steps you can take right now to navigate this volatile environment. We’ll explore strategies to not only weather the turbulence but potentially profit from it as well

All Stocks currently 40% off – Buy Now!

Over the past decade, the stock market has primarily been on a steady upswing, the S&P 500 alone has averaged an annual return of about 13%. Even with the current market turbulence, many long-term portfolios are thriving, and part of the reason why is savvy investors take advantage of market pullbacks like the one we’re currently experiencing.

For example, when Crowdstrike (CRWD) dropped to around $117 per share in May of 2023, I went all-in because I was confident the stock was severely undervalued. Today, the stock is trading around $330.00 a fantastic win that highlights the power of strategic buying during downturns.

Here’s a simple strategy to effectively buy during market dips:

1. Develop a Watchlist: Focus on industry leaders with solid financial health, avoiding lower-tier companies that may struggle in volatile environments.​ Some companies on my watchlist (some I currently own) are Nvidia, Eli Lilly, Spotify, Meta, TSM, Palantir, Costco, Crowdstrike and BJ’s.
2. Establish Tiered Entry Points: Determine multiple price levels at which you’re willing to invest.  This strategy helps you avoid the mistake of attempting to time the market. Here’s how that might look in practice: Let’s say Disney is on your watchlist and it trades at $138 per share.
   • 1st Tier – Entry Price: The price at which you’re comfortable initiating a small investment (e.g., $126)
   • 2nd Tier – Buy More Price: A lower price point signaling a greater opportunity (e.g., $106).
   • 3rd Tier – All in Price : A very attractive valuation, an opportunity to significantly increase your stake (e.g., $86).

Using clear, defined entry points helps keep emotions out of the decision-making process and positions you to capitalize if the market drops. Also having cash on hand in this environment is critical as it ensures you’re able to pounce on opportunities as they present themselves.

How I’m Positioning My Portfolio

In times of market turbulence, taking defensive measures becomes crucial to protect your investments. Personally, I hedge my portfolio by investing in assets that typically hold their value or even appreciate during downturns. Recently, I’ve added exposure to precious metals through ETFs focused on gold and silver, as these assets often perform well when markets become shaky.

Another strategy I’ve used recently is options trading, particularly buying short-term puts on ETFs like XLK (Technology) and SMH (Semiconductors). These options can increase in value when their underlying assets decline, acting as an insurance policy for my broader portfolio.

By taking profits from these short-term hedges, I generate income for myself and can continue funding defensive moves or invest in long-term positions at discounted prices as opportunities arise.

Hedging protects your investments during downturns and positions you to capitalize on future growth when markets eventually recover.

Important Note:
While using inverse ETFs or put options can effectively hedge your portfolio, they carry significant risk because they move opposite to the natural upward momentum of the market. These should strictly be considered short-term plays, and you should never hesitate to lock in profits once you’ve achieved a respectable return and don’t hesitate to cut your losses if the position moves against you.

Proceed with Caution: Stocks to Avoid During the Market Chaos

In the current climate of tariffs and trade uncertainty, some sectors and specific companies could struggle more than others. It’s wise to avoid or carefully consider investments in industries heavily impacted by recent policy decisions, particularly tariffs and the potential for retaliatory measures.

Automakers such as Ford and General Motors will likely face increased costs from tariffs on steel and aluminum, cutting into their margins or forcing higher vehicle prices. Honestly, these weren’t particularly attractive investments even before tariffs were announced, especially Ford.

Retailers are another area to watch closely. While Walmart has performed well and could offer a buying opportunity if its stock dips significantly, companies like Target might be riskier bets given their additional challenges, including political headwinds.

Also, stay away from speculative or small-cap stocks during heightened uncertainty. They’re usually more volatile and can lead to significant losses. Remember, stick with Fruit Loops—not Tootie Fruities.

In short, avoiding heavily affected sectors and unstable small-cap companies lets you dodge unnecessary risks, keeping your capital ready for stronger opportunities.

Final Thoughts

The most important thing to remember during uncertain times is to acknowledge your emotions without letting fear, anger, or panic lead to irrational decisions. While volatility can be scary it also presents incredible opportunities to buy great companies at discounted prices and generate income through strategic moves. Stay disciplined, stay patient, and capitalize on opportunities created by market uncertainty.

If you’re ready to keep learning, subscribe below to download my latest free e-book, How to Invest with ChatGPT, and start navigating the market with confidence.