It's time for investors to play the long game

Investing, like golf, is a mix of both the short and the long game. In the wild first half of 2025, investors have mostly focused on the short game, but now that we appear to be entering a period of relative calm, investors can start looking much farther down the fairway.

- Jay Pelosky

Following months of back-and-forth tariff drama after US President Donald Trump's April 2 “reciprocal tariff” spectacle, many markets now appear to be settling down.

US equities jumped around a bit this week, as news that a court had blocked much of Mr Trump's tariff agenda was quickly followed by the announcement that the tariffs would remain in place during the appeals process.

The upside of any future tariff news is apt to be limited because the risk-asset rebound already appears to have largely run its course, with most US markets — excluding the dollar index — more than recouping their post-“Liberation Day” losses. The S&P 500 and Nasdaq are up around 18% and 25%, respectively, since April 8.

Market focus in the US now seems to be shifting from tariffs to tax cuts, as investors zero in on the impact that widening budget deficits could have on US interest rates and dollar strength.

Outside the US, attention also seems to be turning away from the trade war, with many investors homing in on the potential for spending-driven European growth, the return of Japanese inflation and the gradual recovery of the Chinese consumer.

So let’s take advantage of the current reprieve from market turmoil and consider how these longer-term trends could impact investment strategy over the next five years.