President Donald Trump's ever-changing tariff policies have sent the markets into free fall, worrying the average American about their retirement funds and potential stagflation. But the 1% aren't necessarily surprised by the president's actions and orders. In fact, they are positioned to cash in on the chaos.
That's according to Charlie Garcia, managing partner and South Florida chair of R360, an invitation-only peer membership organization for individuals with a net worth of $100 million or more. He says the 130 members of R360 members, who own a combined $50 billion in assets, are using the current market instability and changing tariff policies as a moment of recalibration, looking for new opportunities to take advantage of.
"He’s basically doing what he told everyone he was going to do," says Garcia. Many members made plans in advance: following Trump's election in November, they tweaked portfolios based on actions Trump made in his first term, including imposing hefty tariffs.
They also expect that the on-again, off-again nature of the tariffs will be resolved in the next six months, as compromises are reached.
"A lot of them feel that things will stabilize in important areas, tariff-wise," says Garcia. "That doesn't mean we won't go into an overdue recession, that's a totally different topic."
Defense is one sector that's looking more appealing right now, says Garcia—but not necessarily the big players. These ultrawealthy investors are interested in turn-around stories like Rolls-Royce and up-and-comers like Palantir.
"There's a war in Ukraine, it's a very unstable world," he says. "It's not only tariffs, but [Trump] is saying we're not supporting NATO as much."
Bitcoin is another area that members are interested in. In fact, some helped to personally change Trump's viewpoint on the cryptocurrency. It helps that the Florida chapter of R360 holds meetings at one of the President's golf courses, allowing members to rub elbows with him and his inner circle. "They knew there would be big shifts in the crypto world," says Garcia.
Members sit with an average of 10% of their portfolios in cash, Garcia says, and many followed Warren Buffett's lead earlier this year and last to build up their stockpile.
"Buffett is the biggest indicator," he says. "When they see him start deploying his cash…they have their eyes on things, and then they deploy theirs."
Still, given their net worths and sizable cash piles, Garcia says, members are prepared to ride out the market instability and potential recession.
"It's an enviable position to be in," he says.
