President Donald Trump slaps tariffs on steel and aluminum, China hits back against U.S. farm products. The stock market plunges one day, then roars back the next. It’s hard to make sense of it all but certain to keep investors up at night.

How do you cash in on a possible trade war? How do you minimize the damage?

Investors have a slew of strategies to choose among, from simply waiting it out to using options and futures to bet for or against industries caught in the crosshairs.

While some companies might be expected to gain from trade protections, it’s not clear how the broad market will react to the uncertainty as the drama plays out. Conventional wisdom says the markets don’t like uncertainty, so an extended tit-for-tat would probably hurt more than help.

But other U.S. manufacturers can be hurt, he adds.

“The tariffs will increase the cost of automobiles and may lead consumers to simply drive existing cars longer,” Johnson says. “Auto parts firms like Genuine Parts Co. (GPC) and O’Reilly Automotive (ORLY) are two firms that would benefit from rising new car prices.”

U.S. exporters could find sales sagging if the trade war escalates.

“Industries that stand to lose include tech, aerospace, and autos, as these industries export a large amount of goods and services abroad, and to China specifically,” Johnson says. “Popular names like Boeing (BA), United Technologies (UTX), and Apple (AAPL) would be hard hit from a protracted trade war.”

China’s response hits a wide range of U.S. products, many from farm regions that supported Trump. Laurence Ales, associate professor of economics at the Tepper School of Business at Carnegie Mellon University in Pittsburgh, notes that aircraft, passenger cars and soybeans top the latest list.

“Of interest is the tariff on U.S. soybeans,” he says. “China currently absorbs 60 percent of soybeans exports. The tariff on this product will have wide-ranging and dispersed geographic repercussions. The USDA reports that (as of 2007) there are more than 275,000 farms producing soybeans mostly concentrated in Illinois, Iowa and Minnesota.”

A hit to economies in those regions could hurt sales of all sorts of goods and services.

Among investors’ dilemmas: should you sell or short a company likely to be hit, or buy it in hopes it will rebound when the trade war ends?

“My first thought would be to buy what is being temporarily hammered in the markets,” says Joe D. Franklin, president of Franklin Wealth Management in Hixson, Tennessee. “Buying the dips and undervalued items has proved profitable over time, and especially since profits are still coming in strong, we shouldn’t have a protracted pullback for a while, absent a large trade war escalation or major unforeseen event.”

He also suggests investors avoid becoming fixated on trade war targets.

“I would also be focused on things not affected by the trade war,” he says. “This would include anything outside of the U.S. and China. Although I would be buying Chinese companies that primarily do business in China.”

The simplest strategy for small investors, experts say, is to do nothing, to fall back on the belief, supported by many studies over the years, that trying to time the stock market’s peaks and troughs is a loser’s game. In this view, long-term investors saving for retirement or college generally do better counting on the fact that broad markets have always recovered from setbacks to register new highs. Investors who move to the sidelines in downturns often fail to get back into the market in time to enjoy the rebound.

But standing pat is a tough strategy for an investor in or near retirement who is more focused on drawing income than padding capital gains. And many investors, even buy-and-hold fund users, set some money aside to trade the trends and hunches. No problem with that, experts say, so long as it’s small enough that you can afford to lose it.

So for those who feel compelled to react to a trade war in some way, the pros have a few tips aside from specific bets mentioned above:

Go to cash. Bank accounts and money-market funds pay next to nothing but keeping principal safe will look like a sound move if stocks are hammered. A retiree who draws on investments for income might be wise to build a larger-than-usual cash reserve, to avoid the need to sell stocks during a slump.

But Johnson says it’s hard to judge the right moment to return to stocks.

“Nobody rings a bell at the top or bottom of the market,” he says, citing an old Wall Street adage. “I don’t believe there is ever a good time for long-term investors to put money on the sidelines. But, it is especially problematic in the current circumstances given the unpredictability of President Trump. It is not inconceivable that the tariffs could be reversed as quickly as they were enacted.”

Buy Treasurys. U.S government bonds are the go-to choice in a flight to safety. Like cash, they are not terribly generous these days but would look good if stocks sink.

China owns enormous amounts of Treasury bonds and could threaten to dump them if the trade war escalates, causing prices to fall. But self-interest could restrict those moves, since China could not sell its enormous stake overnight, and a big bond dump would crush the value of China’s remaining holdings.

Investors worried about the trade war contaminating the bond market can be more secure buying shorter-term bonds, or funds devoted to them, since bonds nearer maturity are not hit as hard by market jolts.

Short the market. Investors more inclined to walk on the wild side can bet against market sectors, or even the broad market as a whole. That can be done with short sales of index product such as exchange-traded funds that represent those sectors or the market as a whole. Options and futures contracts can also be used to bet that underlying securities will fall.

But if you’d need a primer on these strategies, start very small or don’t join the battle until you finish your training.

Source: US News & World Report