Financial markets have been on a bit of a roller coaster since the beginning of the year. In the face of so much uncertainty, investors have taken some money off the table in the things that have done well, such as US equities, to put it into things that have lagged, such as European shares and currencies.
The question is, are these the beginnings of new trends and should we rebalance our investment portfolios to get ahead of them? Maybe, but the problem is the lost performance if we don’t get this right. Are we really prepared to call the end to the dominance of Apple, Google and Amazon? Lest we forget, the Nasdaq is up 1600% in the last sixteen years, and that’s after losing 10% since February.
Growth has also been rather aminic in Europe for quite some time. Sure, the Germans have just announced that they may finally start spending, but they don’t have a government yet. For all the political hyperbole, it’s not like the EU has come up with a unified response to its economic woes, let alone come to grips with the loss of its second largest member.
Tariffs here, or tariffs there, quit NATO or the UN, do a deal with Russia or Ukraine, protect Taiwan and invade Greenland or annex Canada? Even in the best of times, trying to predict the markets is one thing, but doing it when there is a high chance that Donald Trump will simply change his mind again, is quite another.
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