US equities have consistently shown resilience and outperformed international counterparts, largely due to robust economic growth and a strong US dollar.
The "America First" policy is expected to continue supporting US equities, while non-US equities may face headwinds due to tariff policy uncertainties. However, geopolitical risks such as interest rate policy, trade tariffs, and high inflation rates pose significant risks to market performance.
Maintaining a diversified portfolio and using the MSCI World as a benchmark is advised, but high valuations of US equities raise concerns about potential market corrections. Factors such as convergence of economic growth between the US and other major economies and the evolving political landscape in the US could challenge the continued outperformance of US equities.
The technology sector, particularly the "Magnificent Seven," has been a driving force for US equities, but concentration of market power raises sustainability concerns. Close monitoring of risks and cautious investment strategies are necessary.
Investors should adopt a proactive approach, remain adaptable, and conduct thorough analysis. The interplay between US equities and international markets is crucial, and investors must weigh the benefits of US equity exposure against geopolitical uncertainties and sector concentration.