IT’S FLAMENCO TIME!
By Sébastien Cavernes, CIO Edmond de Rothschild Gestion (Monaco).
Waltzing is simple enough. Even the worst dancers (myself included) can pull it off in an honourable fashion. The music follows a linear, triple-time rhythm, the dance is elegant, everyone performs the same simple, repetitive and standardised steps and movements, and the whole endeavour is eminently accessible.
Investing in the markets in 2023 and 2024 was a waltz-like experience. At the risk of being overly simplistic, buying S&P 500 stocks and dollar-denominated vehicles was fairly straightforward, with satisfactory returns and few hiccups. Lulled by the steady increase in public spending and monetary liquidity, investors enjoyed an entirely agreeable period of prosperity.
Unfortunately, investing in 2025 will be more like dancing a flamenco than a waltz.