As we move into the second half of 2025, markets are contending with a mix of geopolitical tensions, shifting trade dynamics, and slower U.S. economic growth. Tariffs and trade negotiations with countries like China, India, and the U.K. continue to dominate headlines, and the resulting uncertainty has added a layer of volatility to global markets.
While many companies are in a holding pattern as they wait for clearer policy direction, we believe these conditions are also setting the stage for new long-term investment opportunities. Historically, markets have shown resilience following similar trade-related disruptions. We’ve seen how, after short-term declines, periods of policy clarity can lead to strong market recoveries.
Global Businesses Are Adapting
Multinational companies are responding by becoming more localized in their operations—what some are calling a “multi-local” strategy. Firms are investing closer to their customers and diversifying their supply chains to mitigate the impact of tariffs. Notably, global leaders like Siemens and Apple are investing heavily in U.S.-based production, reinforcing their ability to compete in a fragmented trade environment.
Here at home, domestic sectors such as utilities are showing surprising strength. Driven by the rapid expansion of data centers, growth in electric vehicle infrastructure, and population growth in key regions, utility companies are benefiting from a level of demand not seen in decades. These businesses also offer the added benefit of being less directly affected by international trade risks.
Opportunities Beyond U.S. Borders
We’re also seeing encouraging developments overseas. Germany recently introduced a significant fiscal stimulus package aimed at defense and infrastructure upgrades—an unexpected but welcome pivot from its traditionally conservative policies. This shift is likely to support several industries and may spur additional reforms across the region.
In Asia, corporate governance improvements in Japan and South Korea, along with signs of stabilization in China, are helping non-U.S. equities gain traction. In fact, major international indexes have outperformed the S&P 500 so far this year—a reminder that diversification may remain critical in today’s market.
Security: A Defining Investment Theme
An increasing number of governments are prioritizing national and economic security, with heightened investment in defense, energy resilience, and supply chain infrastructure. This broad trend supports growth in industrials, utilities, and other sectors tied to modernization and long-term stability.
Positioning for the Road Ahead
While the start of the year was marked by optimism and concentration in a handful of tech stocks, the market environment is evolving. Risks have increased—but so have opportunities. In periods like this, it’s important to stay balanced, flexible, and focused on fundamentals.
We’re actively reviewing portfolios to identify areas where we can take advantage of market dislocations and invest in businesses with strong long-term potential. Disruption often brings opportunity, and we remain committed to navigating this environment with clarity and discipline on your behalf.
As always, thank you for your continued trust. If you have questions or would like to review your portfolio in light of current market conditions, don’t hesitate to reach out.
This material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial situation, or needs of individual investors.
The information provided has been derived from sources believed to be reliable but is not guaranteed as to accuracy and does not purport to be complete analysis of the material discussed.
Indexes are unmanaged and do not incur fees, one cannot directly invest in an index. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Past performance does not guarantee future results.
