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Goodness, it’s grim out there. As I type, the FTSE 100 is having another awful day thanks to the trade war instigated by President Trump. It’s now down almost 7% in 2025 so far.
As dispiriting as that might be, I always regard such falls as an opportunity to snap up great stocks at a discount with the intention of building wealth over the long term. That’s what being a Fool is all about.
But buying when everyone else seems to be selling is all easier said than done, of course. And then there’s the question of which particular stocks to go for.
For a bit of fun, I decided to ask ChatGPT.
Potential safe havens
One sector highlighted as somewhere to go hunting was precious metal miners. As the huge gains seen in the gold price in recent weeks show, the shiny stuff has long been regarded as a safe haven by investors in times of trouble. For this reason, Fresnillo could be worth pondering. The £6bn cap is one of Mexico’s largest gold producers (and the world’s leading silver producer). Tellingly, its share price is actually up today (9 April)!
Another sector that cropped up was Aerospace and Defence. From the FTSE 100, we’re talking BAE Systems and Rolls-Royce. Again, I understand the logic behind this. With relations between nations frosty to say the least — not to mention the ongoing conflict between Ukraine and Russia — it looks likely that defence spending is only going in one direction. However, it’s worth noting that these shares have been very volatile of late, probably due to some swift profit-taking.
Great opportunity?
Perhaps the AI bot’s most interesting suggestion, however, was healthcare stocks. Again, this seems logical. As simplistic an investment case as it may be, there will always be demand for vaccines and treatments.
Then again, it’s just been announced that Donald Trump is planning for a “major” tariff on all pharmaceutical imports. This helps to explain why one of the UK’s largest players — GSK (LSE: GSK) — is suffering today.
Although this would represent a clear risk to the company, I’d be staggered if this came to pass. The supply chain in this sector is fiendishly complex and any radical changes (e.g. setting up factories in the US) would take a long time to implement due to regulatory hurdles. This could lead to drug shortages and/or substantially higher prices in the interim, placing lives at risk.
Taking this into account, I agree that GSK is worthy of consideration, especially as its shares already traded at less than eight times forecast earnings before markets opened.
Prior to the tariff war erupting, trading looked healthy too. In February, CEO Emma Walmsley announced that Q4 sales had beaten estimates. The firm’s 2031 sales target was also lifted to over £40bn.
Safety in numbers
ChatGPT can’t predict the future or know my personal risk tolerance and financial circumstances. This being the case, I would never buy a slice of GSK or anything else based purely on what it spews out. I see it as one of many research options, nothing more.
Even so, I fully intend on using others’ fear to my advantage on days like this and, to quote Warren Buffett, load up on ‘quality merchandise’ while I can.
