Redditor Shares Strategy For Dealing With Trump's Tariffs: 'I'm Going To Do Absolutely Nothing'

President Donald Trump's tariffs have created sharp volatility in the markets. Most of that volatility has been downward motion, with the Nasdaq Composite suddenly down by more than 20% year-to-date. Trump has attracted the ire of many Wall Street investors, but not everyone is rushing for the exits.

One Redditor shared that they don't plan to panic sell. Instead, the investor is hanging on to their stocks.

"I see loads of posts and comments about selling holdings in the wake of Trump's tariffs. I'm going to do absolutely nothing," the Redditor stated.

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Staying Focused On Fundamentals

The original poster is a dividend investor who believes their companies are financially sound. The investments also pay good dividends, and the Redditor believes that the madness will pass.

"Cool heads will win the day," the Redditor stated.

High dividends allow the Redditor to reinvest into shares at lower prices. Those stock price drops also translate into higher yields for the newly acquired shares.

When headlines like tariffs promote fear and doom, investors often rush for the exits and forget about the fundamentals. While relieving the pain of stock market losses can provide a temporary reprieve, these same investors miss out on long-term gains. For instance, the stock market suffered sharp corrections in 2018, 2020, and 2022. Equities recovered from all three of those lows.

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Buying More Dividend Stocks

Many commenters agreed with the Redditor, saying that they will buy more dividend stocks as prices continue to decline. Buying the dip has been a great strategy for several years, and it looks like the standard as the market becomes more volatile.

"I'm gobbling up dividend stocks. More stability in an unstable world and I'm not retiring for 20 years," one user responded.

"I didn't sell during the 2008 housing crisis, or the COVID shutdown, and plan never to sell. Buy and hold is the way," another commenter responded. 

See Also: How do billionaires pay less in income tax than you? Tax deferring is their number one strategy.

The Trade War Will Hurt Profits

While most dividend investors in the subreddit are loading up on more dividend stocks, there were some naysayers. Trade wars stand to hurt corporate profits, which can make reliable companies more vulnerable than expected. A sharp decline in demand and profit margins can prompt some companies to temporarily cut or suspend their dividends.

"Potential trade war risks and changes in the economic outlook may affect the ability of some companies to pay dividends, which I think is something to consider," one commenter responded.

Trump used tariffs in 2018 as a negotiating tool, which caused stocks to lose value. The market rally was strong in 2019, but Trump is taking a more aggressive stance in his second term. He recently imposed a 104% tariff on all Chinese goods after China retaliated against the tariffs Trump imposed on Liberation Day. 

The 104% tariff rate is a massive change from the previous term, where blanket tariff rates never exceeded 25%. Trump seems to greet any retaliation with a higher tariff rate of his own, and the swiftness of his response can lead to more carnage in the global economy in a shorter amount of time. 

While most dividend investors want to load up on the dip, it's good to consider the bear case of tariffs as well.

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