- 7th April 2025
- Posted by: Dean Hall
- Categories: Market Commentary, Newsletters
I hope this message finds you well, and that you’re enjoying the longer, brighter days at last.
Following the recent “Liberation Day” tariff announcements by President Trump, markets have experienced something of a knee-jerk reaction.
The primary issue is that the tariffs were higher than anticipated, meaning these “new deals” hadn’t yet been priced into the market.
We are currently seeing elevated levels of volatility, which is to be expected in part due to this development.
As the dust begins to settle, we’re seeing other countries scramble to respond with their own tariffs – a process that will take several weeks to unfold.
That said, some nations have already opened negotiations with the US to reduce or even remove these headline tariffs. I expect this approach will become more common in the coming days, as President Trump seeks to position the US at the centre of global trade once more.
As a point of reflection, the market movements we’re witnessing now are not dissimilar to those seen in the first quarters of 2020 and 2022, when equity markets experienced sharp sell-offs.
As long-term investors, this kind of turbulence is not unfamiliar. We’ve seen it before, and we will see it again.
There is no short-term change in portfolio direction. We leave it to the asset managers to capitalise on undervalued opportunities that are now presenting themselves – assets which may have looked expensive only a few months ago.
Because we invest across a broad range of asset classes and regions, we’re not dependent on any one area. That remains the most prudent approach moving forward.
As with other significant global events, taking no immediate action can often be the hardest choice – but, in my view, it is the right one for now until we gain a clearer outlook.
“Volatility creates opportunity” for asset managers, and I believe we will see this play out again as markets return to a more normal rhythm.
A recent example of this is that US retail investors alone bought $4.7 billion of new stock on 3rd April – the highest daily amount in the past decade.
We will of course continue to keep you updated if anything changes. Otherwise, my next contact will be with the Q1 2025 update as scheduled.
Please do feel free to contact me directly if you have any questions or would like to discuss any of this in more detail.