12 JUNE 2025
Economic activity has been “Covid-like” this year with most growth indicators slumping in response to the initial US tariff announcements, before staging an impressive rebound in recent weeks.
The same is true of the stock market.
2020 ultimately produced stellar returns for equity investors with the FTSE All-World index generating a total annual return of 17% (U$ terms), but it fell by over 30% peak-to-trough in the first half of the year. See blue line below.
We have seen shades of a repeat during the first half of 2025 (red line).
The same index tumbled by 16% (U$ terms) during the closing stages of the first quarter, but has since recouped most of those losses.
In charting terms, once an index retraces more than half if losses, the probability of there being a sustained downturn reduces significantly.
We can thus draw comfort from the fact the global stock market has already sailed through that threshold and is back into positive territory for the year-to-date.
The content of this communication is for information purposes only. Bentley Reid believes that, at the time of publication, the views expressed and opinions given are correct but cannot guarantee replication of depicted performance. Viewers intending to take action based upon the content of this communication should first consult with the professional who advises them on their financial affairs. Capital invested will be at risk, and you may get back less than you invest. The past is not a reliable indicator of future performance. Neither the publisher nor any of its subsidiaries or connected parties accepts responsibility for any direct or indirect loss suffered by a recipient as a result of any action or inaction, in reliance upon the content of this communication.
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