Market Update Q1 2025
Market Update: Navigating Uncertainty in Global Markets
Credit: Waverton Investment Management
The global economy has been unpredictable recently, with market movements driven by political events, inflation concerns, and economic data from the UK, Europe, and the US. Investors are facing a ‘perfect storm’ as previous trends reverse—US markets have struggled, while UK and European stocks have performed well.
Key Factors Affecting Markets
According to Waverton Investment Management, the following factors have been key drivers of market volatility:
1. Trump’s Policies: Trade tariffs, immigration rules, and financial policies have created uncertainty, impacting investor confidence.
2. AI Investment Concerns: Worries about AI-related spending, especially after comments from Microsoft’s CEO, have led to a dip in technology stocks.
3. US-Europe Tensions: Ongoing efforts to broker peace between Russia and Ukraine have added pressure to markets.
Despite these challenges, Waverton notes that economic data and company performance remain strong, providing hope for positive growth in 2025.
Investment Strategy
At Brooks Wealth, we align with Waverton’s global approach to investing. Waverton has commented that while recent changes have shaken the markets, they remain confident in the long-term opportunities within the US stock market.
• UK Market: Waverton highlights that large companies in the FTSE 100, such as those in the pharmaceutical, banking, and oil sectors, have driven growth. However, smaller UK-focused businesses in the FTSE 250 have struggled.
• European Market: Stocks have bounced back from low levels, but continued growth depends on positive economic momentum.
Managing Risk in Waverton Portfolios
To protect against market ups and downs, Waverton ensures that its portfolios are well-diversified and include:
• Fixed Income (Bonds): Waverton sees government bonds as a stabilising factor during economic downturns.
• Alternatives: Waverton invests in Absolute Return funds (which aim to generate positive returns regardless of market direction) and Real Assets such as property, infrastructure, and commodities.
• Gold: Waverton believes that gold remains a valuable asset in uncertain times, with its price reaching record highs. If trade tensions escalate, gold could continue to perform well.
Looking Ahead
Waverton acknowledges that markets are likely to remain volatile, particularly with Trump’s unpredictable policies and global political tensions. However, they continue to focus on investing in high-quality businesses with strong cash flow. They are not making drastic changes to their portfolios but are closely monitoring the situation and will adjust if necessary.
About Waverton
Waverton, one of Brooks Wealth’s favoured investment teams, is an independent investment management firm dedicated to providing personalised investment solutions for individuals, families, charities, and institutions. With a focus on active management and high-quality global investments, Waverton aims to deliver long-term value through a disciplined and research-driven approach.
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