By Andrew Shilling in MarketWatch, featuring Brian Spinelli, CFP®, AIF®, Co-Chief Investment Officer
Is it time to rethink your portfolio?
Last week, amid President Trump’s major tariff moves, investors looked on as markets endured huge swings. Now, with Chinese imports facing tariffs of 145%, and an uptick in overall volatility, it’s likely that some investors are in search of financial safety. Does that mean they should look to traditional so-called safe-haven assets, or consider making portfolio changes?
We consulted with investment experts for their takes on the best safe-haven assets right now and whether investors should take heed. While some of the following suggested strategies can be accomplished on your own, the more complex tips will likely require the support of a money manager or financial adviser.
Consider CDs and REITs, says WalletHub CEO Odysseas Papadimitriou
“In terms of safe-haven options, certificates of deposit are one of my favorites for consumers,” says Papadimitriou, adding, however, to “stay away from checking and savings accounts promising high rates because there’s a lot of bate and switch going on, where the high promised rate is not always going to be there.”
As an alternative, he says, “I also believe that with everything going on right now, that real estate investments, or REITS, that have to do with apartments and housing, will always be relevant in terms of providing a higher return than usually a CD, especially within at least the last few days where everything is getting hit in terms of worldwide trade.”
If you do choose to move into either of these, he advises, “I would not move all of my money all of a sudden from one to the other. I would go gradually. The market can go down or up and you don’t know how it’s going to play out, and I wouldn’t react with aggressive moves.” Also, he adds, “I’m not saying take all your money and put it into a CD or put it all on a REIT. We’re saying diversify and put some in a CD, some in a REIT … or in companies that are domestically sourced and produce their goods in the U.S. They are going to be more successful in a high-tariff environment.”
Private markets and fixed income, says Enventure CEO Ankit Shrivastava
Shrivastava says he’s “keeping some capital in high-yield money market instruments and short-term Treasurys for flexibility. However, the real opportunity, in my view, lies in the private markets,” an asset class that’s often accessed through private equity or venture capital funds. That’s why, he adds, that he is also “focused on partnering with family-owned businesses, especially in health care and core industries, where there’s strong fundamentals but often a gap in succession or scale. These are the kinds of businesses that can weather storms and thrive with the right support.”
Government bonds and CDs, says Money Essentials for Women founder Annie Cole
Cole says considering safe-haven investments is one way to lean into relative stability during periods of volatility. “If this is what you’re looking for, consider investing your money in government bonds rather than stocks,” says Cole, adding that “government bonds generally offer lower returns, but have less movement during a turbulent economy.”
If a more reliable, fixed-income approach is something you’re more comfortable with, she suggests “keeping your money in a CD or high-yield savings account for the time being. Both options will allow you to grow your cash balance while also having access to pull the money quickly if needed.”
Farmland and auto-repair, says Omnigence Asset Management Director Stephen Johnston
Johnston says investors “should expect more stagflationary conditions” — which is the combination of high inflation and stagnant economic growth or high unemployment.
If that’s the case, “farmland is an example of an asset class that flourishes in stagflation,” he says of industries investors should consider adding to their investment portfolios, adding that “during the 1970s, U.S. /Canadian farmland increased 300% in nominal terms.”
Another investment area are companies that come under pressure when the middle class purchasing power tightens, Johnston adds. “An example is auto maintenance,” he says, explaining that “in stagflationary conditions, the average age of a car on the road increases materially and as cars age they consume much larger amounts of maintenance services. Auto maintenance therefore, tends to grow much faster than nominal GDP in a stagflationary macro climate.”
Fixed annuities, CDs, money markets, says Bankrate financial analyst Stephen Kates
Seeking total safety “is unfortunately both relative and fleeting,” says Kates, adding that those worried about rapid asset value erosion would do best in savings or insurance products that offer guaranteed rates of returns. “High-yield savings accounts, CDs, money markets, and fixed annuities are going to offer security and reliability that market-based investments cannot. Individual Treasury securities are still explicitly backed by the government and retain their safety, but investors should not consider bond mutual funds or ETFs to hold the same reliability because they will reprice as interest rates change.”
For his own part, Kates says he has “padded my emergency fund over the past six months but maintain fully invested brokerage and retirement accounts,” adding that he believes “that in 30 years when I am retired, U.S. GDP and corporate earnings will be higher than they are today and that means I continue to be bullish stocks over that timeframe.”
International stocks and ETFs, says NerdWallet investing spokesperson Sam Taube
“International stocks, oddly enough, may be relatively safe, because many publicly-traded foreign companies do most of their business in-country and aren’t that exposed to trade with the U.S. A lot of international stock ETFs are still up year-to-date, while the S&P 500 is down,” he says, adding that as an alternative, “bond ladders — a set of bonds with staggered maturities, which provide cash on a monthly or yearly basis that can be withdrawn or reinvested — can cushion a portfolio against a stock market downturn. These can provide valuable income to retirees in particular, and can prevent them from needing to sell stocks at a low price if they need money.”
Cash and high-quality bonds, says Halbert Hargrove co-CIO Brian Spinelli
“One should keep in mind how they will feel if they miss a recovery if they materially shift their portfolio,” he adds. “Safer investments usually have the lowest return over long periods of time, which is entirely intuitive because you don’t get compensated [with] higher returns for taking less risk.” Nevertheless, “cash, money market funds, and short-term high-quality bonds have a place in portfolios, depending on what the money is needed for,” he says, adding that “we have always advised clients to maintain emergency funds for short-term needs.”
Longer-term bonds, says Savvy Advisors principal wealth manager Robert Barone
The best play in light of uncertainty caused by tariffs, says Barone, is to “buy bonds.” The reason? Although no major investment banks have increased the odds of a recession this year, if one does in fact occur, “the Fed will have to take that Fed funds rate below neutral (3%),” Barone says, adding “falling interest rates mean rising bond prices with the prices of longer-term bonds benefitting most. For investors concerned about a severe Recession’s impact on U.S. corporations, U.S. Treasury bonds, U.S. government agency bonds, and [Fannie Mae] or [Federal Home Loan Mortgage Corporation] mortgage-backed securities are attractive in today’s economic environment.”
Money markets, structured notes and private investments, says Regent Peak Wealth Advisors CIO Nathan Hoyt
With very few corners of the market offering safety, Hoyt says money markets, currently yielding 4% [or more], are warm blankets in this environment for those not willing to take risk.”
Hoyt adds, however, that “while there is nothing safe about the stock market, those with long term investment horizons that buy into these types of volatile markets have historically grown their wealth, and despite the reasons for the sell-off feeling quite scary each time, the best investors consistently buy more risk assets in ugly environments.” He adds that “if tariffs truly are more seeds of inflation, 4.4% is unlikely to keep up with rising costs, even if interest rates remain the same. Using more esoteric strategies like structured notes or private investments can provide a portfolio with less volatility if not higher returns, yet the longer time frame and illiquidity of these types of investments should be considered before selection.”
International equities, fixed income, alternatives and real assets, says Orion senior investment strategist Ben Vaske
Although investment markets are always unpredictable, Vaske assures that “proper portfolio construction stands the test of time,” adding that “investors who bet big on the S&P 500’s top stocks, assuming they were unstoppable, are now experiencing the risks of historic index concentration.’
Rather than rush into a safe haven, “investors should use this moment to recalibrate,” he says. “Consider adding international equities, fixed income, alternatives, and real assets to U.S.-biased portfolios for enhanced diversification, income, and volatility management. These asset classes, which have been living in the shadow of the Magnificent Seven — [Nvidia NVDA+1.37%, Apple AAPL+4.72%, Tesla TSLA+1.07%, Microsoft MSFT+0.87%, Alphabet GOOGL+2.04%, Meta META+0.21% and Amazon AMZN-0.76%] — are once again earning their allocations in portfolios. The lesson is clear: cycles change, and portfolios should be built to weather them.”
