03-04-2025
Trump's Global Tariff Shock: What Should Singapore Investors Do Now?
US President Donald Trump's at it again – this time with a blanket 10% tariff on all imports. US President Donald Trump has announced a sweeping 10% tariff on all imports, with higher rates targeting specific countries. This time, no country is spared.
With fears of a global trade war reigniting, investors might be asking:
What should I do now?
Should I sell? Should I wait? Or should I switch to 'safer' assets?
These are natural questions – but they can also lead to costly decisions if made in panic.
At The Smart Investor, we believe in staying grounded and keeping our focus on long-term fundamentals. Here's why.
This isn't the first time Trump has played the tariff card. We saw this play out during his previous term – from steel tariffs in 2018 to the prolonged US-China trade war.
Markets dropped sharply back then too – but over time, quality companies with strong fundamentals recovered and even thrived.
As long-term investors, we don't invest in headlines. We invest in businesses.
The question to ask isn't, 'What will the market do tomorrow?'
The question to ask ourselves should be, 'Will the companies I own still be profitable, competitive, and growing five or ten years from now?'
For example, many of the 26 stocks in our Smart Dividend Portfolio have strong cash flows and consistent dividend payouts. They may wobble in the short term, but their long-term outlook remains intact.
Tariffs introduce uncertainty, and stock markets hate uncertainty.
That's why you'll often see sharp sell-offs. When a company's share price drops, it is not always because the company is actually worth less, but because investors are nervous.
This can be a good thing.
If you've been eyeing a strong dividend stock or a blue-chip Singapore company with solid fundamentals, but hesitated to buy because of its share price, this might be your chance.
Long-term investing is like shopping for groceries: it's better to buy when quality goods are on discount, not when prices are high.
It's true: some industries will be hit harder than others.
Exporters who rely heavily on US markets could face margin pressure if costs rise or demand drops. Manufacturers tied to global supply chains might see disruption.
But not every company is equally exposed.
In fact, many Singapore-listed firms generate revenues primarily from Southeast Asia or local operations. Companies in utilities, real estate, telecommunications, banks, or even consumer services may be largely insulated from direct tariff impacts.
As an investor, this is your edge: by doing your homework and choosing resilient businesses, you can reduce risk without exiting the market.
When markets are volatile, dividends become more than just a nice-to-have. They act as a buffer—a source of predictable income even as share prices move up and down.
That's one reason why we continue to favour Singapore dividend stocks.
When a business pays a reliable dividend, it signals confidence in its cash flow. And during uncertain times like these, that reliability is worth its weight in gold.
It's tempting to 'wait things out' or move to cash when big geopolitical headlines hit. But more often than not, missing the rebound can be far more damaging than riding out a dip.
The best investors don't try to time every twist and turn.
They build a solid portfolio, reinvest dividends, and stay invested through the noise.
Remember: your investment plan should be built to withstand shocks – not just the good times.
Trump's sweeping import tariffs have rattled markets and stirred anxiety among investors. But in times like these, the smartest thing you can do is to stick to your long-term investment strategy.
If you've invested in strong businesses with resilient cash flows and minimal exposure to global trade risks, there's no need to panic. In fact, you may even view this as an opportunity.
This is the time to review your portfolio, not abandon it. Focus on fundamentals. Stay disciplined. And remember – uncertainty doesn't have to be your enemy.
Uncertainty can be used to your advantage, if you're willing to think long term.
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