Investment Committee - March 2025

Adapting to Market Realities

The Investment Committee convened this month amid heightened volatility in equity markets, seeking to provide clear guidance on the investment landscape for the remainder of March and beyond. The prevailing sentiment among committee members was that investors are increasingly distracted by political developments surrounding Trump’s administration, losing sight of broader market fundamentals. While the initial reaction to Trump’s re-election was a surge in large technology stocks and the U.S. dollar, the Committee discussed how a more prudent long-term strategy may involve positioning against these trends.

Market Observations & Strategic Outlook

Policy Shifts and Global Implications

Until there is a meaningful shift in the aggressive rhetoric emanating from U.S. government officials, we must acknowledge that U.S. policy is poised to challenge several key tenets of the past decade—namely, liberal globalism, free trade, non-tariff barriers, and immigration.

Sectoral Impact and Market Disruptions

The Committee noted that the administration’s stance appears increasingly opposed to Big Government, high taxes, regulation, and excessive spending. As a result, certain monopolistic industries, including large technology firms, big pharmaceuticals, and major food corporations, are already facing headwinds.

Investment Considerations for Client Portfolios

For client portfolios, it is crucial to look beyond the political noise and recognize the broader investment implications. Our long-term recommendations align with the reversal of the four major themes discussed above, and we encourage clients to position accordingly.

Currency and Market Outlook

If our assumptions hold, we anticipate a deliberate weakening of the U.S. dollar, the relative outperformance of Emerging Markets, and a potential underperformance of large-cap technology stocks. Given this outlook, we strongly advise clients to begin scaling out of U.S. dollar positions promptly.

Conclusion

In a market environment driven by shifting political dynamics, it is essential to remain disciplined and forward-looking. While uncertainty persists, a focus on structural changes rather than short-term volatility will guide sound investment decisions. As always, the Committee will continue to monitor these developments and adjust recommendations as needed to optimize client portfolios.

Authors: John Couletsis and Kostas Metaxas