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John Csiszar
4 min read
Immediately after President Donald Trump was elected, the stock market went on an absolute tear. The night before the election, the S&P 500 closed at 5,712.69. By Feb. 12, 2025, the market peaked at 6,144.15, a gain of 7.5% in just over three months. But ever since then, investors have been screaming “look out below.” Since Trump started getting aggressive on his tariff policy, the market immediately headed south, falling into a correction — signified by a drop of at least 10% — in just 20 trading days. By March 13, the S&P 500 was well below its Nov. 4, 2024, level, closing at 5,521.52.
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The worst may not yet be over. Whenever stocks fall into a correction, they court the risk of reaching a full-blown bear market, marked by a drop of at least 20%. With Trump refusing to ease up on the gas with his tariff rhetoric — which, thus far, has translated into actual tariffs — the market is unsurprisingly in turmoil.
At times like these, sitting idly by while your account balance goes down every day isn’t the best strategy. If you take some concrete steps now, in a time of uncertainty, you can not only protect your retirement nest egg but also get some sleep at night. Here are some things to consider.
When markets fall and investors panic, all of that money needs a place to go. Some of the main beneficiaries of this “flight to safety” are defensive stocks. Defensive stocks tend to outperform the overall market when it’s going down because they represent industries that are in demand regardless of how the economy is doing. Even if you lose your job, for example, you’re still going to have to buy food and personal hygiene products. Thus, these types of industries tend to hold up better than those in more discretionary sectors, like travel and auto makers.
Defensive stocks have another ace up their sleeve as well — they generally tend to pay dividends. The regular cash flow of a defensive stock can provide further support to its share price.
To help ride out the uncertainty of Trump’s tariff war — and a potential recession that may follow — consider picking up stocks in more defensive industries.
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One way to protect your retirement account in a falling market is to own non-stock assets. Just like there are defensive stocks, there are defensive asset classes as well. Two of the most classic are bonds and gold.
