| DAILY ISSUE How to Invest Smartly When the Market Loses Its Mind VIEW IN BROWSER Hello, Reader. The British writer Rudyard Kipling famously observed, “If you can keep your head when all about you are losing theirs, yours is the Earth and everything that’s in it.” Although Kipling’s sage insight pertains to many aspects of life, it fits the stock market like a Savile Row suit. In the midst of the many economic and political crosscurrents that are buffeting stocks these days, losing one’s head seems like the path of least resistance. Last Friday, the U.S. Supreme Court decided to strike down most “Liberation Day” tariffs. Since then, new global tariffs set by the current administration have taken effect at 10% for a period of 150 days, unless specifically exempt. Markets stumbled in response. On Monday’s close, the Dow Jones Industrial Average dropped 800 points, and the S&P 500 and Nasdaq were down over 1%. Although by Wednesday, those indices started to recover, as investors breathlessly awaited the latest vital signs from Nvidia Corp. (NVDA). The stock market darling did not disappoint. After the close of trading yesterday, Nvidia announced another dazzling quarterly performance. Since the giant chipmaker did not see any shadows in its earnings report, most investors will assume an early spring of blossoming stock prices will arrive on Wall Street. Still, beyond the bright spots of triumphant earnings reports, it's understandable to feel unnerved by the latest tariff-driven headlines. But a measured reaction can make all the difference between managing a winning or losing portfolio. So, in today’s Smart Money, I’ll detail the precedence for this practice of “keeping your head”… one from the not-so-distant past. Then, we’ll go over some strategic moves you can make today. | Recommended Link | | | | Move your money out of overpriced AI stocks before the tech trade breaks down in 2026. Get into these smaller, lesser-known names that are showing the potential to dethrone the Mag 7 in 2026. Make sure three alternatives to Nvidia, Tesla, and Amazon are on your radar before markets open tomorrow. Get names and tickers here. |  | | Markets on Edge: A Familiar Story In April 2025, the “Liberation Day” tariffs seriously impacted the U.S.’s relationship with its trading partners – and, of course, frazzled the markets. The three major U.S. stock market indexes dramatically plummeted, creating the worst selloff since the start of the Covid-19 pandemic. At the time, I recommended ignoring the noise and continuing to follow megatrends. I told my paid subscribers… You have to continue to look ahead and not be buffeted too badly by the headlines, by the noise. And just continue to, as coolly as you can, assess the opportunities that are in front of you, and then pull the trigger if it’s appropriate. I think that is a practice that runs through all markets, bull markets, and bear markets. And in this particular case, I think the same thing. As I anticipated, markets eventually calmed and recovered their losses in the months that followed. In fact, by July, the three major indices were back up to record highs, largely due to the AI megatrend. I echo the same sentiment this week. Brian Hunt, from MarketWise, puts it well… Our instincts make us pay close attention to potential dangers… both real and imagined. So, our subconscious minds compel us to click on bearish headlines, fixate on disasters, worry about elections, buy magazines with gloomy forecasts on their covers, and fret over 15% stock market corrections. I encourage you to let common sense and the facts shape your actions instead of leaving it up to caveman thinking. You’ll be far more successful investor if you do. Why do I say that? And what are the facts? Well, just consider that the stock market has averaged a positive annual return of 10% for the past 100 years. This is because the trend of increasing prosperity that is powered by free markets and free enterprise is one of the strongest trends in human history. There is precedent for remaining steadfast in the face of market volatility. In agreement with Hunt, I prefer the wait-and-see approach. Still, if we want to survive the markets unscathed, it’s prudent to have protection. So, while I caution you to tune out the noise, it also bears mentioning one unintended consequence of the current administration’s tariff caprice: Trading partners will continue to move away from the U.S. Here’s why… More Tariffs, More Unpredictability Higher tariffs certainly affect the flow of global trade, but not necessarily in ways that shrink trade imbalances between the U.S. and its trading partners. That’s because tariffs only affect half of a two-part equation. They impede the flow of foreign goods into the U.S. That’s true. But they are powerless to boost the flow of trade out of the U.S. In fact, they can inadvertently create the exact opposite effect. As I wrote in Fry’s Investment Report in April 2025… Global trade, like water, follows the path of least resistance. Therefore, when nations erect barriers to trade, it tends to flow around those barriers toward destinations that do not block its path. It’s like the classic breakup line, “It’s not you… it’s me.” We can see this tariff-related change already happening. Last week, the Commerce Department revealed that America’s trade deficit in goods like machinery and aircraft hit an all-time high of $1.24 trillion. You read that right. Despite taxing imports at the highest rates since the 1930s, our “goods” deficit increased. That wasn’t supposed to happen. Someone didn’t get the memo. Perhaps the next wave of tariffs will produce the desired result, or perhaps a growing percentage of global trade will flow around U.S. trade barriers into markets that offer easier access. Whatever the case, uncertainty is certain… and we must prepare for it. Here’s how… How to Position Your Portfolio Right Now Invest in purely domestic-focused, U.S.-based companies… and/or their counterparts overseas. Now is not the time to hold positions in companies that rely on extensive global trading or sourcing. First, you’ll want to look to home-grown companies with strong fundamentals and reliable cash flow. For instance, at Fry’s Investment Report, I recommend a U.S.-based independent oil and gas company. The firm is essentially a U.S.-only energy producer, with oil and gas production concentrated in major U.S. shale basins. Although it previously had international operations, it divested those assets to focus entirely on U.S. onshore shale. So, unlike multinational energy companies with assets in many countries, this firm has nearly all of its assets in the U.S.… isn’t reliant on global refining and distribution… and has lower exposure to foreign trade retaliation. The company recently reached a new 52-week high. And we expect the momentum to continue. To learn more about this company, join me at Fry’s Investment Report today. You’ll also want to look at the other side of the same coin: at foreign companies that solely operate on their own home turf. These companies are less directly exposed to U.S. trade policy, and their revenue drivers are domestic-, not export-dependent. The bottom line is that when uncontrollable forces move the markets, your best weapon is to control what you can. That means staying calm, strategic, and, therefore, profitable. Regards, | 
