We’re about half way through Q1 2025 earnings. So far they’re showing double-digit YoY growth. However what companies are struggling with is guidance. They have very limited visibility through the “tariff windshield”. And whilst stocks are reacting well to past earnings and optimism Trump will back down on his draconian tariffs – it’s difficult to gauge both how much damage has been done? For now, markets remain optimistic however I would treat this rally with caution.
Magnificent Seven
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Focus on High Quality in Challenging Markets
It’s my thesis market returns over the next few years are unlikely to match what we’ve seen over the past decade. However, I’m also of the view that will create great opportunities for savvy patient investors who think long-term. This missive defines what is meant by “quality” investments – and the attributes investors should focus on. And if we are see a more challenging climate the next few years – it’s higher quality assets which will shine.
Downside Unlikely Over
From the moment Trump announced his blanket 10% tariffs in addition to so-called “reciprocal levies” – it’s been an exodus from risk assets. The selling was immediate and sharp – something we’ve not seen since the pandemic five years ago. However, as I will demonstrate, there could be more to come. And from mine – further sharp selling could set up a great buying opportunity for long-term investors.