In the first half of the year, investors increasingly rely on security. Will this trend continue in the further course? This is what analysts say.
• Trump and geopolitical crises unsettle markets
• Investors rely on diversification for risk reduction
• Analysts expect persistent departure from the US stock market
In recent years, US shares – and the big tech companies – have highly performed. But in the current year, Europe was increasingly moving into investor focus. In addition to the concern of the very high ratings of the US titles, Donald Trump’s erratic behavior is also a cause of the recently observed enormous transfer of capital to Europe.
Donald Trump causes unrest
As is well known, investors hate uncertainty – and US President Donald Trump currently provides a lot. On April 2, which he was a “liberation day”, the Republican imposed tariffs against import goods from many other countries. In doing so, he was more aggressive than was largely expected in advance and virtually triggered a trade war. The 79-year-old has now partially rowed back, but his approach is so unpredictable that investors are extremely unsettling it.
The market participants also watch Trump’s feud with US Federal Reserve boss Jerome Powell. While the US President does not get tired of demanding lower key interest rates, the monetary authorities recently left their monetary policy unchanged because they initially want to wait and see how the customs war, which Trump, affects inflation in the United States. However, Trump’s attacks on the independence of the Fed are not well received on the market.
Looking for security
In response to this, investors are now turning into droves from the US capital market. “This year and even in the past few weeks we have seen that investors want to make their portfolios more resistant,” said Matt Bartolini, head of the SPDR America Research at State Street Global Advisors, in a CNBC show at the end of June. “I think that many investors actually had very unresilient portfolios on their way to 2025,” he added.
In fact, there were enormous shifts, including in favor of European shares. On the one hand, this development is also favored by the fact that European titles are not as high as its US counterparts, on the other hand, the new government is planning gigantic investments in defense and infrastructure in Germany, the largest economy in Europe.
What’s next in 2025?
In the opinion of Bartolini, this reversing trend will continue. As he explained, he assumes that the international diversification of many US investors who had previously concentrated on the US market will stop: “We saw larger tributaries in non-US shares than their market share would suspect, and I think this trend will continue in the second half of the year,” predicts the analyst.
Geopolitical uncertainty, such as the war in the Middle East, also reinforces the endeavors of investors to spread their risk broader. That is why John Davi, CIO at Astoria Portfolio Advisors, also pointed out to “CNBC” that the first half of 2025 was a time for building a multi-asset all-weather portfolio. He advised “to build a well -thought -out portfolio to plan for times of uncertainty”. In his view, raw materials are usually safe systems in uncertain times, explicitly mentioned gold and oil.
Editor finance.net
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