Dear Investors,
Market Introduction
I’ll be honest – March 2025 has felt like standing in the eye of a storm.
Every day, there’s another headline that makes you rethink everything: new tariffs, inflation that just won’t quit, central banks hesitating, gold shooting higher, and bond yields doing their own dance.
But amidst the noise, I’ve found something powerful: clarity through simplification.
As a global macro investor, I’ve learned that sometimes the best thing you can do is zoom out, strip away the noise, and reassess the entire map with fresh eyes.
Not with panic. But with purpose. With curiosity. With intention.
Instead of feeding you another list of technical bullet points, I want to walk you through what I’ve learned this month.
What I’ve changed in my portfolio. What I think matters for us as investors. And most importantly – how you can use these insights to protect and grow your capital.
I’ve always believed that markets tell stories.
This month, they’ve been screaming. And if we listen closely enough, we might just hear the clues we need to stay ahead.
April 2 Isn’t Just a Date – It’s a Signal
President Trump is calling it “Liberation Day.” But in reality, it’s a red flag for global investors.
It marks the moment when the U.S. drops a heavy round of tariffs – 25% on cars and auto parts, another 25% on countries importing Venezuelan oil, and more penalties aimed at Chinese exports.
But here’s what matters even more: this isn’t happening in isolation.
Canada is retaliating with $21 billion in tariffs. China is suspending lumber imports and slapping taxes on American agriculture.
Europe is drawing its own lines. And global trade? It’s no longer free – it’s fractured.
We’re entering a new regime – one where cooperation is giving way to confrontation.
The market’s response has been telling. The S&P 500 is down 3% year-to-date – not catastrophic, but symbolic.
Behind that number is a sea of volatility. We’ve seen rapid selloffs, sector rotations, and wild swings in sentiment.
And yet, what’s even more surprising? Europe and China are up. Yes – up. The MSCI China Index and EuroStoxx 50 have gained over 10% this year.
Investors are betting those regions will be more resilient than expected, even as they’re directly targeted by U.S. tariffs.
The U.S. Economic Policy Uncertainty Index is now 1,604% above its long-term average. That’s not a typo.
That’s the highest reading since the last major trade war in 2018.
This isn’t just about protectionism.
It’s about preparing for a world where macro shocks come faster, policy is more unpredictable, and diversification is no longer a luxury – it’s a necessity.
The U.S. Is Still Strong – But the Market Edges Are Shifting
Let’s be clear: the U.S. economy remains a powerhouse. Over the past two decades, it’s outpaced peers in both growth and resilience.
Average real quarterly GDP growth since 2000? 2.1%. Compare that to Europe’s 0.9% and Japan’s 0.4%, and the story is obvious.
That’s why U.S. equities have been the global default. They’ve delivered. But what if that narrative is starting to shift?
Germany is making moves. Their €70 billion stimulus plan – their largest since the financial crisis – is aimed at rebooting growth and positioning the country as a leader in clean energy and digitization.
It’s a bet on the future.
Meanwhile, Japan is seeing its own stirrings. A second BoJ rate hike is on the table, and capital inflows into Tokyo equities are at a multi-year high.
This is subtle. It’s not a loud handover. But it’s a signal.
I’m not abandoning the U.S. – but I’m widening the lens.
Increasing my exposure to select European sectors – particularly infrastructure, renewables, and financials benefiting from the rate shift.
I’m watching Japanese exporters. And I’m reassessing what “home bias” actually costs us when the world gets more competitive.
India: From Meltdown to Momentum
If you’ve been watching India lately, you know it’s been a wild ride. From September 2024 to February 2025, Indian equities lost 20.7% of their value. That’s a painful drawdown.
What caused it? Slower GDP growth (5.6% vs expected 6.5%-7%), disappointing corporate earnings, a controversial capital gains tax hike, and over $29 billion in foreign investor outflows.
India had gone from market darling to market disaster – fast.
But then came March.
A 6.39% gain in a single week – the strongest in four years.
Foreign investors returned with $2.1 billion in inflows. Large-cap valuations reset lower to 20.9x forward earnings – below the 3-year median of 21.9x.
That’s encouraging. But mid-caps at 36x and small-caps at 28.4x? That still makes me cautious.
Urban tax relief measures could boost household spending. But that alone isn’t enough. India needs an earnings story to match its valuation.
And right now, we’re not there yet.
I’ve reopened some exposure to Indian large-caps – especially firms tied to infrastructure, finance, and consumption. But I’m avoiding the frothy pockets.
This is no longer a momentum trade – it’s a fundamentals game.
Bond Yields: What the Market’s Whispering
If equities are about stories, bonds are about truth. And the bond market is whispering something big.
The U.S. 10-year Treasury yield has dropped 22 basis points this year to around 4.35%. But don’t mistake that for calm. Underneath, there’s tension.
Consumer sentiment is at its lowest level since January 2021.
The Treasury General Account is flooding markets with liquidity. Pension funds, insurers, and sovereign wealth funds are all bidding for long-dated paper.
And globally? U.S. Treasuries still offer a 156-bps premium over Bunds and a 277-bps spread over JGBs.
But then there’s inflation.
The Fed just bumped its 2025 inflation outlook from 2.5% to 2.7%. And with new tariffs coming, prices could climb faster than expected.
So what do we do? As a macro investor, I’m managing duration with precision.
I’m holding some short-to-intermediate bonds, favoring quality corporates and floating-rate structures.
I’m watching real yields closely. And I’m cautious about duration drag in portfolios that haven’t adapted.
This is a market that rewards flexibility. Not fixed views.
Gold: When Fear Meets Function
Gold isn’t just glistening – it’s gleaming.
The yellow metal is up 15% year-to-date and now trades above $3,000/oz. That’s not just a technical breakout – it’s a message.
After years of net selling, U.S. investors have snapped up over 400 tonnes of gold via ETFs in 2025 alone. That’s about 11-12% of global annual mine supply.
This isn’t just a fear hedge – it’s a confidence shift.
The S&P 500 in gold terms has dropped to 1.9x – its lowest since the pandemic-era lows of 2020.
Gold is reclaiming its place in portfolios – not as a speculative asset, but as a structural hedge.
Against inflation, currency debasement and geopolitical disruption.
Personally? I’ve increased my allocation – not to bet on disaster, but to prepare for complexity.
Gold is no longer about fear. It’s about function. It’s your portfolio’s insurance policy in a world of crosscurrents.
The Fed Hit Pause – But Don’t Get Comfortable
March 19th: the Fed held rates at 4.25%-4.50%. They downgraded GDP growth to 1.7% for 2025 and nudged inflation expectations up.
Markets celebrated. The S&P 500 jumped 1.1%. Nasdaq soared 1.4%. But underneath the surface? Cracks are forming.
High-yield credit spreads have widened by 63 basis points since mid-February.
Consumer delinquencies on credit cards, auto loans, and even mortgages are starting to climb. The MOVE Index – Wall Street’s bond volatility gauge – remains elevated. And yet, risk premiums in many corners of the market remain tight.
That’s a disconnect.
This is the moment where defense matters.
I’ve trimmed risk in high-yield. I’m leaning into healthcare, utilities, and consumer staples.
In credit, I favor short-duration investment grade over long-duration yield traps.
When volatility is low but risks are rising, complacency becomes costly.
The World Has Moved – Have You?
March 2025 isn’t just another month. It’s a macro pivot point.
Tariffs are back with force. The Fed is cautious but cornered. Gold is roaring. Credit markets are tightening. Global leadership is shifting. And investors? We need to evolve.
This is no time for passive positioning. The old 60/40? It needs upgrades. The U.S. as default leader? Still dominant – but no longer unchallenged.
Have you recalibrated?
Are you thinking globally, hedging for real or nimble enough to pivot as signals change?
Because the biggest risk right now isn’t volatility. It’s inertia.