Is now a good time to invest in stocks and shares?

• Market uncertainty and tariff risks suggest now may not be ideal for broad stock buying.
• Some strong stocks look oversold, offering potential long-term value for selective investors.
• The best strategy could be to build a watchlist and wait for stability or positive policy shifts.

What Just Happened on ‘Liberation Day’?

In early April, the US administration sprang new tariff rates – dubbed ‘Liberation Day‘ – on most countries. In bid to outdo his predecessors, the president hiked America’s tariff rate to the highest levels since the 1930 Smoot-Hawley Tariff Act.

But what are tariffs – and why have the markets plunged on these measures?

Tariffs are taxes collected by the US government when goods manufactured elsewhere are imported into America. Some called it ‘import duty’. The key intention of tariff is to create a price differential (of similar products) and encourage consumers to buy local. This is to protect the ‘local’ businesses.

In the past, tariffs were very common (see below). But things have moved on. Globalisation – an ongoing economic and corporate theme since 1950 – has flattened the business supply chain. Many consumer goods are now manufactured across the globe. Governments do not wish to return to the ‘Beggar Thy Neighbour‘ policies in the thirties that led to the Great Depression. To this end, tariff rates across the world have declined steadily after the Second World War.

The US president now wants to roll back all these changes.

The new tariff rates (see White House announcement) are designed to ‘take back economic sovereignty’ and ‘reprioritising U.S. manufacturing’. Vietnam, for example, will see its US exports incur a new duty of 46 percent. This makes its export less competitive. In sum, a wholesale change in the global manufacturing patterns is approaching, along with it, a swell in economic uncertainties.

Source: YaleLab (April 2, 2025)

Markets Plunged as Tariff Retaliation on the Horizon

The real danger is that other countries will not take the tariffs squarely on the chin. They will retaliate.

A day after the Liberation Day, China, the world’s second largest economy, struck back with a 34 percent tariff on US-China goods. European Union is forming its response this week. When import duties go up all around, consumers’ wallet shrink. Prices on essential goods will rise.

On April 4, the Fed chair Jerome Powell immediately warned that “while tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.”

In other words, the downside risks for the world economy have increased markedly since April 3 – risks that may persist in the coming months.

Accordingly, financial markets plunged as expectations adjust downwardly to the new world. Investors now realised that: a) the new US tariff regime will proceed and stay, and b) other countries will increase tariffs on US exports.

Corporate profits will suffer immensely in this new, higher tariffed, world. Companies like Nike (NKE) – and other companies with many foreign factories – are staring at a massive demand shock.

Moreover, countries that depend significantly on world trading, such as Hong Kong and Japan, are set to see a shrinkage in trading volume, too. No wonder Hong Kong’s Hang Seng Index plunged 13 percent on Monday (April 7) – the sharpest decline since the Asia Financial Crisis. Many Asian and European stocks saw double-digit decline.

Amidst the Market Mayhem, Should You Buy Stocks?

The old adage of buying stocks when there is blood on the street still rings true. But should we do it now? And if we’re buying, what should we buy?

For now, market volatility is surging as economic uncertainty swells. Some stocks are collapsing due to indiscriminate selling. One prominent driver for this sudden wholesale clear-out are margin calls faced by leveraged hedge funds.  Brokers are dumping collateral on the market regardless of the fundamentals.

Are we at the end of this heavy selling? Maybe, maybe not.

Traders are bracing themselves for a sharp decline on Wall Street this week. But if the US administration changes direction – however modest – Wall Street will surge. Therefore, we should have a list of ‘potential buys’ in case prices dip further.

Here is a quick re-cap on some of the most popular stocks in the market.

Rolls-Royce (LSE:RR.)

Very few large-cap UK stocks have done as well as Rolls-Royce in the past four years. Prices have rallied the proverbial ‘ten-bagger’ (80p to 800p). But the recent market turmoil caused prices to correct to 550-600p. This setback could be an opportunity for long-term investors to buy the engineering group at attractive prices.

Apple (US:AAPL)

The new US tariff regime will undoubtedly hit Apple. How hard this will be is an open question. As one of the world’s largest consumer electronic company, Apple has plenty of Asian factories making its iconic phone and computers. Going forward, however, many of these products will encounter higher tariffs (for US consumers). But will this stop consumers from buying Apple entirely? Perhaps not. Despite the recent market rout, I would not be surprised on sharp rebound from major support at $160 and $120.

Tesla (US:TSLA)

The EV car company is facing grave threats. Tesla’s business moat, once solid and insurmountable, is steadily demolished. Companies like BYD are rapidly its market share. More recently, consumers are slowly boycotting the car company because of its CEO’s political stance. As a result, Tesla share price cratered. But are these problems temporary? Hard to say. Tesla’s share price has fallen harder amongst the trillion-dollar tech companies, for good reasons. Relative underperformance is always a red flag. Therefore, I would stay on the sidelines here until some bullish catalysts appear to overturn the market’s negative opinion.

Nvidia (US:NVDA)

Quarter after quarter, Nvidia has stunned Wall Street with its market-beating results. Elevated by the sudden popularity of AI, Nvidia became a must-have stock in 2024. After a 1,500 percent rally – and momentarily became the world’s largest company by market cap – its chart looks toppy. The increased trade frictions will dent its business. GPU, for example, is now caught up in the tariff confusion. As a trade, support at $80 may induce a counter-trend rally.

When is the best time to invest?

Ultimately, the best time to invest in stocks and shares is when you have the money, the appetite for risk and time for your investments to grow in the long term.