European Stocks Surge
's stock market, particularly the financial-services sector, has seen significant gains in 2025, attributed to a improving macroeconomic environment and strategic shifts like 's deficit spending and a focus on military self-sufficiency.
The recovery, described as V-shaped, follows sharp selloffs due to US tariff announcements, with a weakening US dollar further enhancing gains for unhedged US investors.
Latin America and REITs Rally
's stock markets, buoyed by , , and smaller markets, have rebounded with over 22% gains in 2025, reversing a challenging 2024.
Outside the , (REITs) have performed exceptionally well, benefiting from low or falling interest rates, although US REITs lag behind global counterparts due to higher US interest rates.
The Value of Diversification
The dynamic investment performance of 2025, with surprising winners like European stocks, Latin America, and REITs, underscores the importance of diversification across geography, style, and market capitalization.
This year’s market trends challenge the dominance of US mega-cap technology stocks, highlighting the risks of concentrating investments in high-performing sectors and the potential benefits of contrarian bets.