I’m not losing sleep over whether prices are up or down. After 30 years in the markets, I’m basically numb to it. Come on, markets go up, markets go down, sometimes for good reasons, sometimes for no reason at all, and sometimes just to mess with us.
After two straight years of double-digit gains, a growing number of investors are bracing for 2025 to be the year the bear finally wakes up from hibernation. Some argue the market is overvalued based on widely watched indicators, fueling a more pessimistic outlook. As for me, watching anything that moves in my models is just another day at the office.
Meanwhile, markets have been doing their best impression of a seesaw, trying to digest the long-term impact of potential US tariffs. Goldman Sachs’ chief US equity strategist, David Kostin, warns that every 5% tariff increase could trim S&P 500 earnings per share by 1-2%. In the near term, Goldman’s models suggest the S&P 500 could drop as much as 5% if these tariffs go into effect.
In my view, tariffs are more of a bargaining chip than an economic wrecking ball. Some impact from new tariffs is inevitable but not enough to derail the bull market. If that happens, a more defensive strategy will be in order. Until then, the bull market is alive and well, just do not forget about the volatility lurking around, waiting to drive us all a little crazy.
On a brighter note, January was a strong month for all our positions, particularly in multi-assets, which performed well across the board. The year is off to a solid start, reinforcing the broader uptrend at least for now.