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It’s time to eat humble pie. Just one slice, be careful. This includes Doff caps from Portadown to Graham.
I don’t know Graham personally, but our path was the most gli-days in which the global markets were shaking in early April, when US stocks plummeted in response to Donald Trump’s super-charged world trade tariffs.
BBC Radio Ulster kindly asked me to explain to the public what was going on. First question: “Katy, what is the stock market?” (For the record, I love it obligatory. There really is no such thing as a stupid question in the financial market.)
Anyway, Graham called for him to share his views. In other words, he didn’t know in detail how tariffs would pan out, but he knew that whenever there was a dip in the US stock market, you should buy it and he was doing just that. If I remember correctly, this was lunchtime in London on April 9th. In the days at this point, US stocks had fallen 13%, and the global market was bleeding.
Now I didn’t tell Graham he was wrong. But I said that I didn’t give investment advice and stressed that I would never do so, but that he was braveer than me. In fact, buying a dip is a trial and tested tactic with a good record of success, but at that point, let’s say e-songly that things don’t look good.
We all know what happened a few hours later. Trump retreated and stocks exploded higher. If Portadown’s Graham stays true to his words and picks up the courage to buy (he sounded very determined), he has risen about 25% to those US stocks since our brief chat. Praise, Graham.
Even after that point I didn’t know that the coast was sunny. A few days later I wrote that the case for buying a dip is too unstable for me. Hindsight is especially great on the market, but looking back, Trump really made chicken and it changed everything. US stocks measured by the S&P 500 Blue Chip Index have grown 7% so far this year.
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“We have this gap,” said Vincenzo Vedda, chief investment officer at DWS in Germany. “Experts look at this and say, ‘This is wrong,’ and retailers say, ‘Your expert said, ‘Your expert said to buy dip for the past decade, so buy dip.’ ”
Either way, they were right. Therefore, one slice of humble pie is consumed appropriately. delicious.
But I haven’t eaten the rest yet. Since the market shakeout in April, and in fact, most large investors outside the US have seen US exposure fresh and critically. This is the number one topic of conversations between current institutional investors and takes quite a while to fully unfold.
Every week, a man in Florida who has a Hotmail sends me an email saying I’m an idiot, as my charming recent correspondent says “silly face” to suggest that this phenomenon is real. They are serious money managers who will not sell US stocks and bonds.
However, this remains a misunderstanding of the situation. It’s not that large investors are unlikely to sell US assets in a meaningful volume. The question is whether we will continue to buy them on a scale we have become accustomed to in a world where US inventory accounts for 70% of the indexes in developed markets. Maybe of all the new pounds that are currently flowing into stock pensions, 70p will not head to the US in five years, but it’s like 65p or 60p.
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That means there are big chunkheads in Asia and Europe. This is a much smaller market that many global investors have shunned for years. So it’s no wonder that many of them have comfortably outperformed US stocks in 2025. Several European indicators have grown by more than 20% this year. Meanwhile, for euro-based investors, a steady decline in the dollar has consumed every profit. They still fall by around 6.5% against US stocks so far this year.
Big asset managers who don’t think about how to avoid this pain or at least hedge, because this pain doesn’t do their job properly, there’s a new introspection over the global popularity of defense against damages from slide dollars and whether or not already expensive US stocks are truly worth volatility or political risk.
“We’re looking forward to seeing you in the future,” said Talib Sheikh, Portfolio Manager at Fidelity International. “Why can’t we be more Asian and Chinese ex-Japan than the US, make up a large part of your portfolio? Why can’t we have Europe as a larger part?
Much of the market turmoil since the 2025 opening game has passed as we are in the second half of the year. However, the oldest certainty in finance has collapsed.
katie.martin@ft.com
