Skip to main content

How to Trade a Two-Front Trade War

Publish date:
Video Duration:

Before, investors only had to worry about the possible trade war with China. 

But, after President Trump announced a plan to place tariffs on Mexican goods starting June 10, investors may be feeling a little anxious. 

However, there are ways for investors to protect themselves and even trade when faced with a two-front trade war. 

Stephen "Sarge" Guilfoyle, a Real Money contributor, weighed in on how he's handling the trade news.

"Well, it's a multi-front trade war. I mean, nothing's to stop the president if he feels emboldened from going after, say, Germany, on the auto front or some other country. I mean from his point of view, we probably has had some success at least pushing around these countries to try to bend them to his whim or maybe obviously [he's trying to bend them to his whim] but they've certainly taken notice and he's hurting them probably to a greater degree than he's hurting us. So that said, you want to take something of a strategic view," said Guilfoyle.

So, how should investors position their portfolios?

"I think you want to make your book really narrow. I've been getting rid of any garbage I have in my book. Who needs to look at 75-80 names. You know, I got it down to probably like, I don't know, I didn't count them but I'm sure I'm below 50 right now," continued Guilfoyle. "And, for the home gamer that means eight to 10, okay? Cause this isn't what you do for a living. You're doing something else eight hours a day when you can't keep your eyes focused on everything. So for the home gamer, eight to 10, maybe 12, if you're really experienced and you think you can handle it, but you don't want to be spread too thin." 

Related. Jim Cramer: It's a Herd Market and These Stocks Aren't Done Going Up

Related Videos