Once the turkey has been digested, the disillusioned European investor will note that - as usual (16 times out of 17 since 2008!) - US markets are out-performing other markets, the European one in particular. This is routine, although the scale of the S&P500 out-performance in 2024 is quite exceptional: +23% Stateside compared with a meager +6% over on this side of the Atlantic for the STOXX600. There is no shortage of structural explanations for the US out-performance and we are detailing them in this newsletter… In light of the 2024 sequence, Of the two alternatives available to investors: Remain invested with the winners (the technology sector) among the winners (the US market) or invest in more troubled areas, we have chosen to do both. On one hand, it might be too late to increase already sizeable allocations to US “best in class” yet very expensive business models. On the other hand, expectations are so low for the 2nd group that the slightest upturn could produce outstanding returns. Diversification is the only “free lunch”, and we believe that this adage is particularly relevant for a good start to 2025. We are discussing these various topics in our newsletter.
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