It’s been 10 months since US President Donald Trump’s ‘Liberation Day’ tariffs shook stock markets, but now tariffs are back in the financial spotlight.
While markets have only dipped slightly, it’s clear investors are starting to get nervy again.
On Monday this week, the price of gold and silver, often considered more of a ‘safe-haven’ asset when things get shaky, hit record highs while stock markets continued to trend lower.
Why did stock markets fall?
Trump’s pursuit of Greenland, which is part of the Kingdom of Denmark, is causing a rift between the US and Europe, and now talk has turned to tariffs.
The US president is insisting that the US needs Greenland as a matter of national security, but Denmark, along with a number of other European countries, are standing in the way.
As a result, from 1 February, Trump is imposing 10% tariffs on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland. It’s expected that these tariffs could even rise to 25% unless a Greenland deal is done.
However, Europe is now threatening retaliatory tariffs, adding even more uncertainty. And as we saw last April, markets don’t like tariff uncertainty.
So, amidst all of this stock market turbulence, how should investors react?
How to invest during stock market uncertainty
1. Don’t panic sell, think long term
In times like this it’s easy to get spooked by a few big market falls, but it’s important to remember to stay focused on the long term.
While your portfolio might be taking a few hefty knocks now or over the next few weeks and months, these market moves become much less relevant over 5, 10, 20 years or more.
That’s because history has shown that investments are much more likely to go up over the long term and sometimes the best days will follow the very worst.
Being able to block out the noise and stay focused on your long-term financial plan is usually what separates good and bad investors.
You only have to go back as far as last April to see this in action.
Within a week of ‘Liberation Day’ markets rallied again, with US stocks climbing 9.5% — its biggest daily one-day rally since the Great Financial Crisis in 2008.
While markets remained volatile for the rest of April, the US then had its best May since 1990, with the FTSE 100 and the rest of the world following.
All of this shows that sometimes it’s best to just sit on your hands, as hard as it might be, and think about your time horizon — after all, time in the market is much more important than trying to time it.
Investing monthly is a great way to invest during stock market uncertainty.
That’s because when you invest regularly, like with the InvestEngine Savings Plan, you benefit from something called pound-cost averaging, which helps smooth out the ups and downs that come with investing in the stock market.
When prices of stocks or an exchange-traded fund (ETF) are low, your money buys more of that investment. When prices are high, your money buys less. That means over time, you’ll average out the cost of your investments and find a middle ground with relatively low effort.
You don’t need to start with a lump sum of thousands. With fractional investing through InvestEngine, you can start from as little as £20 a month and gradually build your portfolio.
2. Make sure your investments are diversified
Holding a diversified investment portfolio is one of the best ways to make sure you achieve investing success over the long term.
This means holding a number of different investments — like stocks, bonds, gold and cash — that won’t all perform the same.
Diversifying across different investments, sectors and parts of the world means all your eggs aren’t in one basket. So, no matter what happens to markets, you should always have something going in your favour.
Where are InvestEngine staff investing in 2026?
3. Are you happy with how much risk you’re taking?
While it might be hard to watch, it’s natural to see your investments go up and down in value — it’s something every investor just has to accept.
Generally though the longer your investment time horizon, the more risk you can take.
Someone who is a few years off retirement isn’t going to have the same portfolio as someone who has a time horizon of 30+ years.
For example, if someone is closer to retirement, they might have more bonds or other investments to help preserve their wealth or start paying an income. On the other hand, someone who is younger might be looking to grow their wealth instead so is happier to take more risk.
However, if seeing your portfolio fluctuate is all too much to bear, then you could be taking on too much risk.
If that sounds like you then perhaps you could think about rebalancing your investments and investing in less volatile areas of the market instead.
If you’re still checking in on your portfolio every day, but you’re comfortable with how much risk you’re taking, how much you’re putting in, and are investing for the long term, then think about taking a step back and let compounding work its magic.
How to rebalance your ETF portfolio
How to invest during stock market falls: 3 ETF ideas
If you’re looking to start investing, or even just start investing more, but are concerned about the current uncertainty, here are three ETF ideas that could help.
For more details on each ETF, visit the factsheets and key investor information.
1. Invesco FTSE All-World
This ETF offers investors the opportunity to invest in a wide range of companies from across the globe, including both developed and emerging markets. It aims to mirror the performance of the FTSE All‑World index, providing diversified exposure to the world’s stock markets.
This ETF might appeal to those looking to spread their investment across different countries and sectors, potentially reducing risk while potentially benefiting from broad global market growth.
2. Xtrackers GBP Overnight Rate Swap
This ETF aims to replicate the performance of the SONIA rate. SONIA stands for ‘Sterling Overnight Index Average’, and is the average interest rate banks lend money to each other overnight.
The ETF is aimed at investors looking for a ‘safer’ place to keep their money with a little more growth than a traditional savings account might offer. It invests in very short‑term, high‑quality debt from governments and companies, making it less risky. This fund may appeal to investors who need their money to be relatively accessible and want to avoid the ups and downs of the stock market.
3. iShares MSCI World Minimum Volatility
This ETF aims to provide exposure to global stocks with potentially lower volatility compared to the broader market. It selects companies based on criteria expected to result in lower volatility.
This ETF might appeal to investors who are looking for potential growth in their investments, but are also conscious of risk and would like to limit exposure to large market swings.
Important information
Capital at risk. The value of your investments may go down as well as up, and you may get back less than you invest. Past performance is not indicative of future performance.
ETF costs apply. If in doubt, you may wish to consult a professional adviser for guidance.