Selling in the month of May and “going away” for some period of time seldom makes sense in any given year. But in 2025, it feels as tempting as ever to sell one’s stocks and head to bonds, GICs (guaranteed investment certificates), cash, or cash equivalents. With Trump’s tariff war delivering new details daily, things really couldn’t be more volatile. But, as you’re probably well aware by now, volatility acts in both directions.
A terrible Monday, like the one we had this week, can be followed by a melt-up rally in the following sessions (think the Tuesday-Wednesday rally driven by a few comments from Trump). It’s not worth timing markets at a time like this, when missing one single day of outsized stock gains could set you back by some months, quarters, or even more than a year.
For new investors, it’s more about maximizing your time in the markets, rather than getting in, out, and back in again based on Trump comments that he could go back on the very next day!
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Trump tariffs make it tempting to sell in May — but doing so could be a mistake.
At the end of the day, new investors who can’t handle the volatility should reassess, rebalance, and perhaps re-evaluate their asset allocation. In this piece, we’ll look at a few names that could make the Trump tariff tornado of turbulence that much less rattling. With Trump showing a willingness to reduce sky-high tariffs on China, I do think that a de-escalation of sorts could spark a rally that leaves us right where we were before Liberation Day tariffs sent global markets nosediving. Of course, zero tariffs seem to be off the table, at least for now.
But if negotiations go well or even a tad better than expected, I suppose anything is possible. And for that reason, investors should stay invested and resist the urge to track the damage done to their portfolios after every single big down day. Unless you’re on the hunt for a stock to buy on the dip, following the market every day or on the hour may cause you to skew towards that of a panic seller.
Without further ado, let’s check in with a few names that may actually be fantastic deals as we exit the choppy month of April with a bit of nausea.
Royal Bank of Canada
Royal Bank of Canada (TSX: RY) shares are down around 9% from their all-time highs, thanks in part to tariff fears. Though there’s no way for Canada’s top bank to steer clear of tariff concerns, I do think that there’s considerable bounce-back potential as we go from a point of peak tariffs and rapid escalation to cutting tariffs, de-escalation, and maybe a new trade deal that leaves both sides in better shape as the great bull market looks to continue forward.
Indeed, it feels like we’re in the midst of a recession right now, but, believe it or not, the bear can still stay in hibernation.
In any case, RY stock looks like a bargain at 13.3 times trailing price-to-earnings (P/E). Despite the recent correction, the robust bank has what it takes to ride out the larger waves. With a 3.6% dividend yield and a robust dividend-growth profile, I’d be inclined to buy the dip in May rather than head to the sidelines.
