Ahead of Isa deadline day tomorrow, the mood is apprehensive rather than anticipatory, following US President Donald Trump’s unveiling of his tariff plan on Wednesday.

This Make America Wealthy Again measure has shrunk the value of many existing stocks and shares Isas.

Some investors, dismayed by the turmoil, are wondering whether to make last-minute use of this tax year’s Isa allowance. 

Other investors will, in the next few days, open their 2025-26 Isas, but choose the safety of cash.

But is this the right approach, although tariffs may have ‘some pretty seismic ramifications for the world economy’ in the words of Jim Reid, chief strategist at Deutsche Bank? Or is this the moment to stop doomscrolling through your portfolio?

Jacob Falkencrone of Saxo Bank argues that this could be a moment to be resilient rather than panic-stricken, saying: ‘With preparation and clarity, investors can ride out the volatility – and perhaps even find opportunities.’

Donald Trump’s Make America Wealthy Again tariff plan has shrunk the value of many existing stocks and shares Isas

A phlegmatic stance will not be easy, since, for many recent private investors, losses are an unfamiliar experience. Even the professionals have been unnerved.

In Wall Street, the mindset has moved from a focus on greed to fear of further turbulence.

It may seem simpler just to wave goodbye to the stock markets. But this could be damaging to your long-term prospects.

Here’s how to be a good loser today – and add to your chance of being a winner later.

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More volatility lies ahead. That should not be a signal to sell, but to reassess your portfolio to prioritise diversification.

Too much focus on one sector is risky, yet you could regret disposing of your stake in that sector.

Juliet Schooling Latter, research director of Fund Calibre, comments: ‘When clients see that they have lost money, many will want to sell, believing that they’ll buy back in when shares start rising again. 

‘It can be hard to persuade them that they are crystallising their losses and will struggle to time their return to the market.’

Jason Hollands of Bestinvest says the impact of the measures will not be immediately clear.

Companies may raise prices to defend profit margins, but others may opt to manufacture more in the US, or find other export markets. For this reason, you should ‘sit tight, don’t panic and wait for the dust to settle’.

If, while assessing your portfolio, you despair over the performance of some funds or stocks, academic research may not help you much in a decision to sell.

The precepts of legendary fund manager Warren Buffett may be more instructive, however. 

He argues that it is time to say goodbye to a share if the fundamentals of a business have substantially changed, or that something better comes along in the shape of a cheaper stock.

In Wall Street, the mindset has moved from a focus on greed to fear of further turbulence. Pictured, traders work on the floor of the New York Stock Exchange yesterday morning

Buffett sometimes reduces the size of his holding, rather than disposing of the whole chunk, which has been his strategy lately with Apple.

FOMO (fear of missing out) is a poor motive for buying a stock. But fear that the price of the shares may decline further is not sufficient justification to sell.

Tariff alarm has caused a 21pc tumble over the past three months in the shares of ‘Magnificent Seven’ member Nvidia.

Yet 46 of the 62 analysts that follow this semiconductor giant rate it a ‘Buy’ and none has issued a ‘Sell’ recommendation.

HOW TO SPREAD YOUR RISK

This is the time to engage with your portfolio, checking whether it is overly concentrated in one sector – such as the Magnificent Seven tech firms.

It makes sense at present to have some money in safe havens such as gold, the price of which has soared 17pc in six months to a record $3,135, spurred by forecasts that it could reach $3,500.

Funds like Ishares Physical Gold invest in bullion, while funds like Ninety One Global Gold back gold mining companies. Troy Trojan offers a mix of gold, shares, bonds and cash.

It’s worth noting too that more Wall Street heavyweights are moving into Europe. Larry Fink, the influential chief executive of Blackrock, says that Europe is starting to tackle the regulatory roadblocks that have impeded the progress of stock markets.

Vanguard FTSE Developed Europe ex-UK is a widely-recommended index fund.

Blackrock Continental Europe Income and Fidelity European are active funds that appear on several best buy lists.

The FTSE 100 dropped in the wake of the tariff tirade. No surprise, since the £60bn-worth of goods a year that the UK exports to America have become £6bn more expensive, following a 10pc tariff on this trade. But Goldman Sachs calculates that the effective tariff rate could be lower, which is a reason why ignoring the UK could be a mistake.

The continuation of the takeover spree is another reason: international investors seem to perceive that our markets are full of bargains, with a bid only this week for the UK microchip business Alphawave from the US titan Qualcomm.

Selling now could be shortsighted, which is why it may be worth looking at backing Britain bets. The Fidelity Special Values trust favours ‘out-of-favour UK companies that trade on cheap valuations’. The Law Debenture trust owns a mix of shares, and a professional services business for extra revenues.

You may be asking whether you should bid farewell to the US markets. But David Coombs of asset manager Rathbones contends the tariffs should be seen in the context of Trump’s wider ambitions.

This means they may be more of a negotiating tool than a policy set in stone.

He says: ‘There’s an element of shock and awe in all of this. Trump wants lower interest rates and lower inflation, having promised Americans that the cost of living will fall.’

He adds: ‘If Trump fails to deliver on these goals, the Republicans will face difficulties in the mid-term elections 18 months from now. If Congress were to fall to the Democrats, Trump could be a lame duck president, and that’s something that he will wish to avoid at all costs.’

Again, it seems wise to watch and wait.

USE OR LOSE YOUR TAX BREAKS

The major investment platforms – AJ Bell, Bestinvest, Hargreaves Lansdown and Interactive Investor – allow you to open a stocks and shares Isa before midnight tonight in which you stash cash to be invested later. The annual Isa allowance is £20,000 but you can deposit a lower amount.

You can further lessen your risk by ‘pound-cost averaging’ – that is, contributing £100-£200 monthly to a fund or trust, rather than a lump sum.

Hargreaves Lansdown emphasises the benefits of opening an Isa on the first day of the tax year.

Your investments have longer to grow. They are also protected from tax straight away, a factor to consider since we can probably be more certain that tax increases are on their way in the UK than about how tariffs will evolve and their impact.

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