Jim Cramer Recommends Playing Defense Amid Trump Tariff Rout—This Is The Game Plan

It isn’t all too often that Jim Cramer looks quite choked up on television. While he didn’t start yelling on air as he did in the months leading up to the great stock market crash of 2008 (which was great timing by Jim), Cramer said he felt “like a sucker” as he sat down with CNN to discuss the extreme stock market selling that followed President Trump’s Liberation Day.

Whether we’re talking about the equation to come at the “discounted” percentage tariff figure or the potential for severe retaliatory tariffs to Trump’s sweeping reciprocal tariffs, there’s no question that investors are in a panic right about now. Indeed, if you bought the turbulent Thursday implosion in stocks, you were immediately hit with another horrendous day of selling as the S&P 500 tumbled 6% on Friday.

It’s not all too often that the stock market sheds north of 10% of its value in two days. It’s horrifying and has undoubtedly caused many investors to re-evaluate their asset allocation, while rotating towards some of the more defensive plays out there. Either way, uncertainty, volatility, and sheer fear all feel close to their max right now.

And while it’s tempting to bail on the stock market, Jim Cramer still thinks investors should stay the course, but with a slight tilt towards more defensive assets. In this piece, we’ll go over a few stable stocks for investors who want to take Jimmy Chill’s advice by playing defense in a market where defense could very well allow investors to navigate what could be a rough 2025 for stocks.

Jim Cramer’s defensive approach could prove wise as the tariff tumble drags out. 

Though some may be inclined to make comparisons between the current correction and the one endured in 2020, Cramer recently pulled out the 2000 dot-com bubble bust playbook in a post-Liberation Day showing of Mad Money. That could entail a lengthy descent that would entail occasional nibbling, rather than buying with both hands ahead of a V-shaped recovery like the one we saw in the summer of 2020.

If you’re a retiree or are stressed, depressed, or just feeling too much whiplash from last week’s rough trading activity, perhaps shifting gears towards some of the more defensive names that are holding up in this market could prove wise as you seek to navigate a bear market. The Nasdaq 100, which is down close to 22% from its high, is already in a bear market. And the S&P 500 may not be far behind, now down close to 18% from its own peak.

Where to seek defensive plays to ride out a storm?

So, which sectors should you look at if you’re looking to play some defense? Utilities, healthcare, consumer staples, and perhaps commodities could be the place to look. There are numerous ways to navigate the tariff hurricane that’s hitting us. Perhaps buying “unwarranted” dips in the top-performing stocks within each sector could prove wise as investors aim to jolt stability while getting a slight discount.

Personally, I view Costco (NASDAQ:COST) as an unfairly battered stock that could prove a great buy on weakness for those looking to ride out what are sure to be a few months of surprises.

UBS went as far as to name the big-box retailer of bulk discounts as able to fare well under Trump’s tariffs — I couldn’t agree more. If anything, stagflation (an inflationary recession) could bode well for Costco memberships, as more customers look to swim to even greater lengths to save money on a wide range of necessities (and gold bars).

As times get even tougher, I’d be inclined to bet that it’s going to be even harder to find a parking spot over at the local Costco, as new members look to discover the savings they’ve been missing out on. With shares slipping 5.2% to around $916 and change, I’d have no hesitation to pick up a few shares if you’re looking to shift gears to defense without having to give up on growth. In a tariff-fueled recession, Costco may be one of the few firms that can keep its growth going strong.

The bottom line

If Cramer says it’s time to change the game plan, investors should listen up. Whether we’re discussing the calculation of the “discounted” percentage tariff figure or the potential for severe retaliatory tariffs in response to Trump’s sweeping reciprocal tariffs, there’s no question that investors are in a panic right now.

Most importantly, Cramer advises not to panic as one invests in a less hospitable environment for stocks. In my opinion, Cramer’s game plan is worth following, especially if your portfolio took a harder hit than the market.

The post Jim Cramer Recommends Playing Defense Amid Trump Tariff Rout—This Is The Game Plan appeared first on 24/7 Wall St..