Investor anxiety is running high, and headlines are shifting fast.
The recent trade policy shock has investors scrambling for cover — and understandably so. But panic selling isn’t a strategy.
Instead of running for the exits, this is a moment to think tactically: where can you park capital that still delivers income, cushions volatility, and gives you flexibility across time horizons?
We’ve put together a watchlist of reliable, income-generating assets and funds that can help steady your portfolio in uncertain times. These aren’t high-risk, high-reward trades — they’re solid income strategies designed to help investors stay grounded when the broader market goes haywire.
Vanguard Municipal Money Market Fund (VMSXX) – A Tax-Smart Cash Reserve
When volatility spikes, cash becomes king — but not all cash vehicles are created equal. If you’re sitting on emergency reserves or waiting for a better entry point, you might as well get paid to be patient. The Vanguard Municipal Money Market Fund (VMSXX) offers a 7-day SEC yield of 2.87% with the added bonus of federal tax exemption, and in many cases, state tax exemption as well.
With an ultra-low expense ratio of just 0.11%, VMSXX is a compelling choice for high-income investors who want a safe place to park capital — with the tax advantages that come from holding municipal debt. It’s not flashy, but it’s efficient, liquid, and well-suited for short-term positioning.
ProShares Short S&P 500 (SH) – A Tactical Hedge in a Shaky Market
For investors seeking protection — or even short-term profit — during sharp market downturns, inverse ETFs like ProShares Short S&P 500 (NYSEARCA: SH) can be a valuable tool. SH aims to deliver the inverse daily performance of the S&P 500, making it a straightforward way to hedge long equity exposure or express a short-term bearish view.
SH has over $1.3 billion in assets and carries an expense ratio of 0.89%. While not suited for long-term holding due to daily compounding effects, SH works well as a short-term hedge when the market is moving fast and volatility remains elevated.
Laddered Treasury Bills – Safety, Simplicity, and Flexibility
For investors with near- to mid-term cash needs, U.S. Treasury bills offer a safe and flexible way to generate income. As of Thursday, the yield on the 1-year Treasury bill stood at 3.92% — down from the 5% highs of last year, but still attractive given the credit safety and tax benefits. Treasury income is exempt from state and local taxes, which adds value for investors in high-tax states.
Using a laddered strategy — buying T-bills with staggered maturities — gives you regular liquidity while taking advantage of different yield points on the curve. It’s a simple, effective solution for capital you may need in the next 6–12 months.
Vanguard Tax-Exempt Bond ETF (VTEB) – Income Without the Tax Bill
For longer-term investors, municipal bonds remain one of the best ways to earn stable income with favorable tax treatment. The Vanguard Tax-Exempt Bond ETF (VTEB) offers broad exposure to the municipal bond market with a 30-day SEC yield of 3.62% and a rock-bottom expense ratio of 0.03%.
Because the interest is free from federal income taxes, and potentially state taxes if you reside in the issuing state, the after-tax yield can be especially attractive for high-income earners. This is a strong core holding for tax-conscious investors with a multi-year time horizon.
JPMorgan Core Bond Fund (JCBUX) – Diversified Fixed Income With Real Yield
If you’re looking for broad fixed income exposure with a balance between yield and rate sensitivity, the JPMorgan Core Bond Fund (JCBUX) belongs on your radar. It invests across a range of investment-grade corporate bonds, high-quality mortgage-backed securities, and U.S. government debt — offering a steady income stream while helping dampen volatility.
The fund currently has a 30-day SEC yield of 4.54% and an expense ratio of 0.34%. It also carries a strong track record, having held up well in past periods of market stress like 2008 and 2020. It’s a smart choice for investors seeking balance in the fixed income portion of their portfolios.
Bottom Line
Tariffs, volatility, and recession fears are creating a rough environment for risk assets — but that doesn’t mean you have to sit in cash or take outsized risk. Whether you’re waiting to redeploy capital, hedging against further downside, or seeking tax-efficient income for the long haul, these funds and vehicles offer practical, time-tested solutions.
The key right now is not to get shaken out of your plan. Instead, focus on positioning with intention — and keep your cash working even when you’re on the defensive.