Donald Trump's approach to trade has significantly impacted global markets, creating both turmoil and opportunity for investors. His declaration of a trade war initially triggered a stock market crisis, demonstrating the power of a single leader to disrupt the global economic order. This led to a broad sell-off, even affecting U.S. sovereign debt.

In response to the market downturn, Trump announced a 90-day pause on tariffs, excluding those imposed on China. This announcement sparked a dramatic market rebound, with the S&P 500 surging by 9.52% and the Nasdaq jumping by 12.16%. These gains, some of the largest in recent history, highlight the potential cost of reacting hastily to market volatility.

Market analysts emphasize the importance of maintaining a long-term perspective. Fidelity, a major U.S. fund manager, points out that missing even a few of the market's best days can significantly reduce long-term returns. Data from the S&P 500 illustrates this point: an investment made in 1992 would have yielded a 2,061% return by the present day. However, missing the five best days would reduce the gain to 1,265%, and missing the 30 best days would slash it to just 267%.

This pattern holds true for other global indexes as well. The DAX, for example, has gained 1,181% since 1993, but missing the five best days reduces that gain to 682%, and missing the 30 best days cuts it to 75%. Similarly, the French CAC shows a cumulative return of 899%, which drops to 522% if the five best days are missed, and to a mere 40% if the 30 best days are missed.

While the market experienced a significant upswing following Trump’s tariff truce, experts caution against premature optimism. The U.S.'s continued use of tariffs, to varying degrees, is expected to impact growth and inflation. Indeed, the market saw losses return shortly after the rally, and ongoing volatility is anticipated during Trump's second term. Fund managers advise investors to use market rallies as opportunities to secure profits and diversify their investments.

Recent market declines have been fueled by fears of a recession and profit-taking after a strong first-quarter rally in the European stock market. The downward trend on Wall Street, which began earlier in the year, is seen as a correction of excesses following 15 years of sustained growth.

In summary, while political and economic events can cause market fluctuations, a long-term investment strategy and avoiding impulsive decisions remain crucial for maximizing returns. The potential for significant gains exists, but capitalizing on it requires patience and a steady approach.