The Market Impact of Tariffs and Investment Opportunities

If you haven’t noticed yet, it’s been a rough period for the stock market over the past week or so. Following President Donald Trump’s announcement of much harsher tariff rates than anticipated, the S&P 500 fell well into correction territory, and the Nasdaq even finished the week in a bear market, down by more than 20% from its recent highs. This turmoil highlights the fragility of our economy, particularly when external factors like trade policies come into play.

It’s critical to recognize that while some sectors will undoubtedly feel the brunt of these tariffs, others may resist the tumbling market more effectively. Retailers who rely heavily on imported goods are on the frontline and could suffer significant losses. Furthermore, if tariffs lead to inflation or a recession, we might see a spike in default rates at banks, creating a ripple effect through the economy.

Resilience Amidst Market Turmoil

So, where should conservative and patient investors find refuge in this volatile landscape? While some stocks may look vulnerable now, a few solid businesses remain attractive, displaying resilience against the chaos created by recent trade policies. Here, we’ll analyze three stocks that prudently-minded investors may want to consider seizing upon in these trying times.

Markel Corporation (NYSE: MKL)

First up is the specialty insurance company, Markel (NYSE: MKL). The stock has seen a decline of 16% since achieving a fresh all-time high less than two months ago, but it is not without merit. Markel has a significant stock portfolio that has taken considerable hits, and its venture capital arm supports cyclical businesses that feel the impact of tariffs.

However, Markel’s core insurance business is sound and should weather the storm. In the most recent quarter, the company’s operating income grew by 27%, and net investment income increased by a staggering 25%. The management team is conducting a comprehensive review to optimize the insurance business and capital allocation to serve investors better. With an estimated intrinsic value of $2,610 per share, which is 33% above its current trading price, Markel exudes value. Moreover, they have announced a robust $2 billion buyback plan to exploit the valuation gap, making it an attractive prospect.

EPR Properties (NYSE: EPR)

The second candidate is EPR Properties (NYSE: EPR), a real estate investment trust (REIT) specializing in experiential real estate. EPR focuses on leasing properties to tenants that sell experiences, such as movie theaters, ski resorts, and amusement parks. Though the uncertainty created by tariffs could influence some of its cyclical tenants, EPR’s model is fortified by long-term leases, providing steady cash flow.

With a phenomenal yield of 7.6%, paid monthly, the stock is currently trading around eight times the projected funds from operations (FFO) estimates for 2025, making it a compelling investment opportunity. Furthermore, the market turbulence has driven interest rates down, potentially allowing EPR to access growth capital at a lower cost.

Walker & Dunlop (NYSE: WD)

Lastly, we have Walker & Dunlop (NYSE: WD), a leader in the commercial real estate sector. The stock has faced pressure from a sluggish property market, now sitting 35% below its 52-week high. Economic uncertainty will likely impact transaction volumes, but there’s still much to appreciate about this company.

Walker & Dunlop possesses an impressive $135 billion mortgage-servicing portfolio, yielding predictable revenue even in turbulent times. The company’s history of market share growth and its expansion into new verticals are noteworthy. In the current environment of falling interest rates, opportunities abound in the multifamily market, especially in refinancing existing loans, with $526 billion in loans maturing between 2025 and 2027. The stock currently offers a 3.4% dividend yield and trades at a historically low valuation of just 17.5 times forward earnings, showing ample upside potential.

Conclusion: Invest With Patience and Purpose

As a final reminder, I personally own all three of these stocks in my portfolio and plan to acquire more shares if there is further weakness during this market downturn. Investing during turbulent times requires a focus on the long game. While these companies are solid and have shown resilience, volatility can rear its head in the short run. Stay informed, stick to your principles, and view this bear market as an opportunity to align your portfolio with long-term growth prospects!