Global markets are reeling after a brutal sell-off that wiped out trillions in market value, but seasoned investors are not retreating. Instead, they are carefully rebalancing and positioning for the recovery that many believe could come sooner than expected, according to experts.

Markets were rattled on Monday after President Donald Trump unveiled sweeping new tariffs on foreign goods, a move that triggered immediate retaliation from China and warnings of further countermeasures from the European Union.

The escalation blindsided traders, sending Germany’s DAX tumbling more than 9.5% and the Stoxx 600 index into one of its sharpest single-day declines since the early days of the pandemic. In the US, tech giants suffered staggering losses, with more than $1 trillion in value erased in just one trading session.

Asian markets extended the rout overnight as the ripple effects of the tariff fight spread across China, Vietnam, Cambodia, and Sri Lanka, heightening fears of a drawn-out disruption to global supply chains.

Yet amid the panic, some investors are seeing opportunity rather than disaster.

“Periods of extreme volatility have always been breeding grounds for the next cycle of wealth creation,” says Jake McLaughlin, Executive Director of deVere Portugal.

“History shows that investors who stay calm and act decisively during downturns are the ones who come out stronger on the other side.”

While the headlines are dominated by red screens and falling indices, McLaughlin stresses that market recoveries often begin when sentiment is still overwhelmingly negative.

“It’s when fear is at its highest that smart money starts moving,” he says. “Waiting for perfect conditions means missing the real opportunities.”

The temptation for many investors during periods like this is to move into cash and wait for stability to return. But McLaughlin warns that doing so can be a costly mistake.

“Holding too much cash feels comfortable in times of uncertainty, but it’s a high-risk move over the long term,” he explains. “Inflation doesn’t pause just because markets are turbulent. Every day assets sit in cash, their real value is being chipped away.”

Moreover, some of the largest market gains often occur during the most volatile periods. Investors who sit on the sidelines risk missing critical rebounds, which can have a lasting impact on portfolio performance.

“Missing just a handful of the best days in the market can dramatically lower returns over time,” McLaughlin notes. “It’s not about guessing the bottom perfectly. It’s about staying invested in a way that makes sense for the environment we’re in.”

That environment, he adds, now demands a more targeted, selective approach.

“This is not a moment for broad exposure,” he says. “It’s about being precise — focusing on companies with strong balance sheets, pricing power, and global reach. Businesses that can weather a more fragmented trade environment will emerge stronger.”

Regions less exposed to the direct fallout of the US-China-EU tariff war could also present valuable opportunities, McLaughlin points out.

“There’s a lot of noise around the major players, but smart investors are also looking beyond — to markets and sectors that can benefit from the shifting dynamics.”

As the global economy adjusts to a more fractured trading system, resilience and adaptability will be key traits for winners in the next cycle.

“Companies and economies that can pivot quickly will be the new magnets for investment,” McLaughlin says.

Trade tensions and political uncertainty are likely to keep volatility elevated throughout the year. But far from being a reason to abandon strategy, McLaughlin argues that volatility itself can be used to an investor’s advantage.

“Volatility isn’t the problem,” he says. “It’s paralysis that hurts investors. Markets move fast, and opportunities don’t linger forever.”

He adds that while today’s sell-off feels dramatic, market cycles are natural — and downturns sow the seeds for future growth.

“This environment demands discipline, perspective, and smart allocation,” he says. “It’s not about chasing trends or making emotional moves. It’s about staying focused on fundamentals and thinking ahead.”

As global markets shift into a period of prolonged instability, McLaughlin warns that investors must resist the temptation to chase short-term rebounds or retreat entirely.

“Periods like these test both strategy and temperament,” he says. “Those who underestimate the structural changes underway — from trade realignments to political risks — could find themselves exposed long after the initial volatility fades. Careful positioning, not complacency, will be critical for preserving and growing capital in the years ahead.”

To attend the deVere webinar this week explaining Tariff impacts on global stock markets, please email Jake below:

jake.mclaughlin@devere-portugal.pt or the deVere Portugal Office +351 22 110 9071 or book a meeting with him here https://calendly.com/jake-mclaughlin/review

By David Hadley