What May 2025 Hold?
Firstly, may we wish everyone a Happy New Year. Hopefully, it will be healthy and prosperous too.
What may 2025 hold? We start 2025 with ongoing geopolitical uncertainty. The war in Ukraine rumbles on and Israel continues its fight with Hamas and Hezbollah. This is as it was in January 2024, but we can add in the fall of the Assad regime in Syria and a new US President in the shape of Donald Trump.
All these factors lead to unpredictability. That said, “The Donald” believes he can end the Ukraine conflict within a few days of taking his seat in the White House.
We shall see. However, his chances of success have been enhanced with Ukraine’s advances in the Kursk region of Russia, which is a clear embarrassment to Putin, and the increased financial pressure of Russia as Kiev has stopped its gas pipeline supplying Western Europe. Ukraine has its own financial pressures too, and the potential loss of US funding makes it imperative that they find a solution.
Investment markets do not like unpredictability and uncertainty. Consequently, we could expect to see some volatility in prices. However, they do adapt quickly after any initial surprise. Take as an example the World’s biggest stock market index, the S&P500. Since the Ukraine war started, after an initial decline, it has risen c.45%.
We could suggest that the initial dip was a buying opportunity for a savvy investor who appreciates the value of long-term patient investing. No-one, not even Warren Buffet, the most successful investor in the World, can time markets, i.e., when to get in and out. He and his long-time business partner, Charlie Munger, described their target holding period as “forever.” We would be wise to listen to this sage advice.
If the new US President is successful in brokering an end to the Ukraine conflict, this would reduce uncertainty and we should expect to see an easing of price pressures and inflation which could lead to lower interest rates, which is a positive for the long-term investor.
Here at Rutherford Hughes Limited, we believe in long-term investing. Your short-term and emergency needs should be held in cash.
We cannot predict what 2025 will bring us, but we are confident that the long-term outlook for investors is positive. It will not be a straight ascending line and if an investor chooses to sell out, they could lose money. That is a fact of life!
If you would like to discuss your own position, please feel free to contact us. There is no charge for an initial consultation, and we believe that we are easy to talk to. Please click here you get in touch.
