Stock markets are on a knife-edge with Trump’s tariffs.
On the one hand, the US President has announced a 90-day pause on tariffs.
Yet, investors remain wary of his unpredictable moves.
Experts have pointed out that these tariffs could escalate into a full-blown trade war if the US and China continue with their tit-for-tat tariff spat.
Along the way, the level of uncertainty has also risen sharply, plunging investors into a groundswell of pessimism.
So, how should you go about investing when stock markets gyrate violently?
Let’s assess the situation and provide a few suggestions.
Uncertainty is inherent in investing
Believe it or not, investing has always been uncertain.
The very act of investing relies on parking your money in stocks in anticipation of future growth in earnings, free cash flow, and dividends.
There is an element of uncertainty within every company as it navigates a constantly evolving macroeconomic environment and deals with competitive threats.
Investing, therefore, deals with the management of risks amid constant uncertainty.
That said, analysts point out that such wide-ranging tariffs have not been enacted since the Great Depression back in 1930.
The implication seems to be that this is a “once-in-a-century” major event that investors need to be careful about, as it is no longer “business as usual”.
While the ramifications of these tariffs could be far-reaching and are unknown at this point, investors should realise that market downturns have occurred before.
The COVID-19 pandemic in 2020 was also a once-in-a-century event, as the last major pandemic occurred back in 1918.
Known as the Spanish flu, it killed around 50 million people worldwide.
Even the Global Financial Crisis back in 2008 to 2009 was considered one of the worst since the Great Depression, with most investors having their first taste of a major financial upheaval.
You can’t have the cake and eat it as well
The statistics above tell us that crises are not as uncommon as previously thought.
Such events cause stock markets to crash as investors digest the news and fear the worst.
Many will head for the exits as panic reigns, pushing stock valuations down to bargain-basement levels.
Investors commonly talk about how they will gladly scoop up shares of their favourite stocks should they plunge.
But when this plunge occurs, these same investors may freeze up and hesitate because of the significant uncertainty surrounding a major negative event.
The thing is – you can’t have your cake and eat it as well.
Share prices are at bargain prices precisely because investors feel worried about the persistent uncertainty.
Once this uncertainty is resolved or the situation shows signs of improvement, you can no longer pick up these shares at cheap valuations.
Stick with resilience and quality
So, what stocks should you choose when such events occur?
Look for companies with solid track records and experience in managing macroeconomic uncertainty and volatility.
One example is Parkway Life REIT (SGX: C2PU).
The healthcare REIT has an uninterrupted track record of core distribution per unit (DPU) increases since its 2007 IPO.
For its most recent first quarter of 2025, the REIT continued to post higher DPU, up by 1.3% year on year to S$0.0384.
Parkway Life REIT is a great example of a stock that exhibits resilience against crises, and also has a high-quality sponsor in IHH Healthcare Berhad (SGX: Q0F).
Get Smart: Keep calm and carry on investing
The headlines may sound alarming, and the stock market may continue to display sharp volatility.
Your job as an investor, however, should be clear.
You need to focus on purchasing high-quality companies that can weather the storm and emerge unscathed.
You also need to manage your emotions and avoid selling your shares in a panic.
Instead, keep calm and carry on investing.
Such turbulence will throw up attractive investment opportunities that you may not see in a while, so grab these discounts while you can.
Your future self will thank you for doing so.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
