Latest investment update

Published: March 2025

Recent US policy changes have resulted in investors becoming unsure about the future of the economy. But our investment experts still have a positive outlook off the back of strong company earnings and solid long-term fundamentals. 

Numerous US policy shifts on tariffs caused markets to drop on Monday as investors become increasingly unsure about the impact on markets. However, the investment team at Coutts, the bank behind our investment offering, aren’t being distracted by the headlines.

The tariff roll-out could cause US economic growth to slow, but the outlook for company earnings remains strong and the Coutts team doesn’t see a recession on the horizon.

While political uncertainty can impact markets over the short term, history shows they tend to recover, says Fahad Kamal, Chief Investment Officer at Coutts. And right now, the underlying economic data for the US may be softening, but it remains solid.

Fahad said: “It’s worth remembering that such volatility in markets is a normal part of investing. Markets often experience a sell-off every year and, with strong market performance for the best part of two years, we were overdue.

“While we continue to monitor the situation, and stand ready to make changes if necessary, our investment approach is about long-term positioning, not knee-jerk reactions. And right now, we still see positive underlying signals for stock market investing.”

He added: “Fundamentals remain key. The most recent US earnings season, where companies reported how their businesses performed for the last quarter of 2024, offered a positive outlook for 2025. Companies announced robust earnings and expectations for ongoing growth, and the data does not currently contradict that.”

While economic growth is slowing, Fahad’s team doesn’t currently expect a US recession this year. Instead, US policy changes could drive more balanced global growth, with other regions catching up with the US economy that has outperformed in recent years.

Let’s take Europe as an example. We’re seeing a number of positive signals there. The European Central Bank has been lowering interest rates continuously since the middle of 2024 to try to stimulate the region’s economy. And governments within Europe are increasing their defence spending as they try to become more independent from the US.

Both these moves could be positive for the region’s economy, and therefore investors. 

A key element of our funds that helps them absorb these types of bumps in the road is diversification. For example, the Coutts team takes a global approach to its equity holdings, investing across various regions and sectors. The team also invests in government bonds which typically help cushion the funds from the worst of stock market falls.

Fahad said: “We understand such times of uncertainty can be unsettling. But our ‘anchor and cycle’ approach to investing is designed to ensure that, while we navigate where we are in the current business cycle, we stay focused on what matters most – long-term economic fundamentals.

“This, along with strong diversification within our investments and positioning based on hard data instead of headlines, means we feel well-positioned for current conditions.”

Here you’ll find our previous investment market updates.