The Genius-Is-A-Bull-Market Trade Keeps On Winning In 2025

Global markets are exhibiting widespread gains, indicating a strong risk appetite for 2025 portfolio strategies, with foreign stocks, particularly developed markets ex-US, significantly outperforming. This robust performance, observed through November 7th, prompts investors to consider the timing of year-end profit-taking.

Analysis

Global markets are currently experiencing widespread gains, reflecting a strongly positive sentiment and a robust appetite for risk among investors as they position for 2025 portfolio strategies. This optimistic outlook suggests continued momentum in capital allocation.

A significant driver of this performance is the strong outperformance of foreign stocks, particularly those in developed markets outside the US, which are leading gains by a wide margin. This trend was evident through Friday’s close on November 7th, highlighting a clear geographic preference in current capital flows.

The sustained and robust market performance prompts a critical strategic question for investors: whether to realize profits ("cash in one’s chips") before the year-end or maintain current positions. This indicates a potential decision point regarding year-end portfolio rebalancing and risk management.

The analysis, provided by James Picerno, Director of Analytics at The Milwaukee Co., implicitly covers diverse asset classes including developed and emerging market equities, global real estate, emerging market bonds, and commodities, as indicated by the referenced ETFs (VEA, VWO, VNQI, EMLC, GCC). This suggests the positive sentiment is broad-based across various segments.

Key Decisions for Investors

• Investors should evaluate their current exposure to foreign developed markets ex-US, given their significant outperformance, and consider potential rebalancing strategies.
• Monitor for increased volatility or profit-taking activity as the year-end approaches, reflecting the strategic dilemma highlighted regarding "cashing in chips."
• Assess the alignment of their portfolio's risk appetite with the prevailing strong market-wide risk appetite for 2025 strategies, particularly in international equities.
• Review broad asset class allocations, including emerging markets, global real estate, and commodities, to ensure diversification and capture potential continued gains.