ODDO BHF AM
It comes as a surprise to many investors: in 2024, as the year draws to a close, international stock markets have withstood the many geopolitical and geoeconomic pressures around the world. In our view, one rule will prevail for 2025: equity investors will not be able to ignore US stocks.
OUR VISION OF THE FUTURE DEVELOPMENT OF GLOBAL FINANCIAL MARKETS IS WELL SUMMED UP BY THE FOLLOWING TEN THESES:
1) Volatility in financial markets will increase in 2025 in the wake of geopolitical risks. International diversification is therefore essential. Currently, the level of volatility in the stock market is unusually low. Also in 2025, investors should show interest when volatility increases and others become afraid.
2) Equity markets are sometimes highly valued, but there is no reason to believe that a speculative bubble has formed. Positive stock performance in 2024 was driven by a small number of large-cap technology stocks. The extreme concentration of the stock market constitutes a major risk in 2025 and also argues in favor of broader diversification.
3) In 2025, equity investors should not bet on short-term bets, but opt for long-term commitments in the equity markets. Those who invest in stocks for the long term benefit from the effect of compound interest, which Einstein once called the “eighth wonder of the world”, and from the fact that the risk of loss of stocks decreases with the length of the investment period. 'investment.
-4) Careful stock selection remains the rule also in 2025. We favor investments in long-term growth trends such as artificial intelligence and transformative medicine. Our advice to investors for 2025 is to invest in companies that offer high returns on capital, have clear competitive advantages, are structurally growing in revenue and trade at a reasonable price on the market. .
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