Trump Tariffs: How To Protect Your Retirement Account During Periods of Market Volatility
Written by
John Csiszar
Edited by
Molly Sullivan
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Immediately after President Donald Trump was elected, the stock market went on an absolute tear. The night before the election, the S&P 500 closed at 5,712.69. By Feb. 12, 2025, the market peaked at 6,144.15, a gain of 7.5% in just over three months. But ever since then, investors have been screaming “look out below.” Since Trump started getting aggressive on his tariff policy, the market immediately headed south, falling into a correction — signified by a drop of at least 10% — in just 20 trading days. By March 13, the S&P 500 was well below its Nov. 4, 2024, level, closing at 5,521.52.
The worst may not yet be over. Whenever stocks fall into a correction, they court the risk of reaching a full-blown bear market, marked by a drop of at least 20%. With Trump refusing to ease up on the gas with his tariff rhetoric — which, thus far, has translated into actual tariffs — the market is unsurprisingly in turmoil.
At times like these, sitting idly by while your account balance goes down every day isn’t the best strategy. If you take some concrete steps now, in a time of uncertainty, you can not only protect your retirement nest egg but also get some sleep at night. Here are some things to consider.
Own Defensive Stocks
When markets fall and investors panic, all of that money needs a place to go. Some of the main beneficiaries of this “flight to safety” are defensive stocks. Defensive stocks tend to outperform the overall market when it’s going down because they represent industries that are in demand regardless of how the economy is doing. Even if you lose your job, for example, you’re still going to have to buy food and personal hygiene products. Thus, these types of industries tend to hold up better than those in more discretionary sectors, like travel and auto makers.
Defensive stocks have another ace up their sleeve as well — they generally tend to pay dividends. The regular cash flow of a defensive stock can provide further support to its share price.
To help ride out the uncertainty of Trump’s tariff war — and a potential recession that may follow — consider picking up stocks in more defensive industries.
Own Defensive Asset Classes
One way to protect your retirement account in a falling market is to own non-stock assets. Just like there are defensive stocks, there are defensive asset classes as well. Two of the most classic are bonds and gold.
Bonds, especially high-quality ones like Treasury bonds, often receive massive inflows of money when the stock markets fall because investors are clamoring for safety. As Treasury securities are among the safest investments in the world — and they pay regular interest as well — they can help protect account values when stock markets are plummeting.
Gold doesn’t pay any interest, but it’s often used by investors as a safe haven or “store of value” when the world is in turmoil. Not surprisingly, as the stock market has fallen into a correction in early 2025, gold has reached an all-time high price of $3,027 per ounce.
While you don’t want to panic and convert your entire portfolio from equities to bonds and/or gold, picking up a decent position in these more defensive sectors can help stabilize your account value.
Buy the Dip
If history has proven anything, it’s that investors who buy the dip and hold their positions for the long run profit the most. Although past performance cannot guarantee future results, the stock market has never failed to ultimately set a new high again after it has fallen into a correction, or even into a bear market.
Of course, picking up shares when it seems like the world is collapsing is always difficult emotionally. But assuming you have the time horizon to wait for a recovery — and the risk tolerance to hang on through the potential volatility of the next few months or years — you could be rewarded handsomely down the road. Remember, even if you are close to retiring, your retirement account may have to fund your lifestyle for another few decades. With this kind of runway, buying the dip can still be an appropriate strategy. But if you have any doubts, discuss your goals and risk tolerance with a financial advisor.
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