The world has been thrown into total turmoil by America’s foolish import tariffs.
That is only to be expected, given that the US market is seen as the pot of gold at the end of the rainbow for many exporters.
But America wants to recalibrate its trade relations with the rest of the world. It wants exporting countries to open their markets to America in exchange for access to its market.
The Trump administration has decided, rightly or wrongly, that tariffs are the crowbar that will force open the doors to economies around the world.
It remains to be seen if that happens. You can lead a horse to water, but you can’t make it drink.
Nevertheless, the ensuing uncertainty has led some businesses to delay critical capital investments, even though many are enjoying record levels of earnings and cash.
Peppered with uncertainty
The future is always uncertain, but uncertainty has never halted growth in the past.
However, doubts over the future have filtered into the psyche of investors, too.
With many markets hovering at all-time highs, investors are wondering if this could be as good as it gets.
Some investors might even dip in and out of the market because of predictions of “experts” who flip and flop depending on the latest economic data.
A soft US payroll number could nudge investors towards equities, as it could suggest the Fed might cut interest rates.
Then again, higher-than-expected producer prices could push investors in the other direction because it could infer that the Fed might be more inclined to sit on its hands.
Everything is then thrown out of the window when a softer-than-expected reading of consumer prices sends Trump and his yes-men on a rant about interest rates being too high.
Then, when US import prices jump, the yes-men are nowhere to be seen and traders get jittery again.
The turn of a tarot card
For me, investing is a long-term pursuit.
Warren Buffett once said that the basic game of investing is overwhelmingly in favour of the investor.
Thus, he said, it would be a terrible mistake to dance in and out of it based on the turn of a tarot card.
He added that the risks of being out of the game are huge compared to the risks of being in it.
If an investor as successful as Warren Buffett does not believe that he can successfully time the market, then we must ask ourselves why we think that we can possibly do it successfully.
Point is, we can’t be right all the time, so why bother?
What’s more, we can’t be profitable every single year. There could be times when our portfolios suffer a setback. But that is never a good reason to bail out of equities.
One of the main causes of failure in investing is picking the wrong shares.
Many fail because they start with the answer they want and then work backwards to find a supporting rationale. It will be much better to stand back and make investment decisions based on our deep understanding of a particular industry.
Lifeblood of any business
That approach has led me to focus on income investing.
Others might prefer growth investing or a value-focused discipline.
But I prefer to stick to what I know.
I like looking for companies that are capable of generating free cash flow. Cash is unquestionably the lifeblood of a sustainable business.
With free cash flow, a business can easily pay dividends, buy back its shares if necessary, and invest in future projects.
I also like businesses that have pricing power, especially in a tariff-troubled global economy.
There is little doubt in my mind that the US tariffs will be inflationary.
It is inconceivable that prices won’t be higher in the future compared to now, if global supply chains are disrupted as a result of America’s tariffs.
And we all know that when prices go up, they rarely ever come down again, which is why we should try to invest in inflation-beating assets.
As an income investor, I am looking for companies that can raise their dividends consistently or offer a high dividend yield.
It is even better if they can do both.
It is my way of ensuring that my money keeps pace with rising prices.
This approach isn’t fancy. But investing should never be fancy or complicated.
Investing should be about getting the simple things right.
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An earlier version of this article was published by the Business Times in August 2025.
Disclosure: David Kuo does not own any of the shares mentioned.
