The global investment landscape is evolving rapidly, presenting complex challenges to high-net-worth individuals (HNWIs) and accredited investors. Charles Schwab is drawing on decades of expertise to help investors navigate the uncertainties of 2025.
A.J. Kahling, head of the international trader segment at Charles Schwab, says: “Today’s investment landscape could be described as ‘constantly evolving’ but not necessarily complex. Shifts in investment trends are happening quicker than ever before, and with the constant flow of information readily available to investors all around the world, we all can react faster.”
With the change in administration in the US, Charles Schwab advises long-term investors to ignore the noise surrounding the political landscape and maintain focus on their goals and financial plans, as historically, the markets are more likely to be influenced by corporate earnings and monetary policies, rather than election outcomes.
The good news is that the US equity market enters 2025 with a resilient foundation, supported by strong breadth metrics. “The past two decades have brought more sustainable and resilient growth in the domestic economy, and more self-sufficiency in terms of food and energy production; lessening the reliance on trade. This has led to higher returns on US capital and in turn ample capital inflows alongside a strong US dollar,” according to Charles Schwab’s 2025 US market outlook.
However, heightened volatility looms as policy changes, including likely tariff adjustments and immigration restrictions, may trigger inflationary pressures and growth challenges.
“For nearly the entirety of 2024, the S&P 500 has had at least two-thirds of its members trading above their 200-day moving average, and although there has been a lot of churn and weakness under the surface, the strength in long-term breadth has been a key support in limiting drawdowns at the index level. That might change in 2025 if policy coming out of Washington sends the market on a bumpier ride,” says Kahling. Aggressive tariff increases and restrictions on immigration have the potential to put pressure on stocks via higher inflation and slower growth.
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Given that the exact policies have yet to be announced, it is still too soon to determine their specific impact. Kahling notes that virtually all estimates or models suggest that the full implementation of tariffs and immigration restrictions will result in some kind of negative impact to growth and inflation.
“Given the potential for tariff and labour policy to be inflationary — and given services inflation is still looking quite sticky — we see a scenario in which headline inflation stays stickier in 2025, struggling to get towards the Fed’s 2% target,” says Kahling, who notes that this may keep the Fed from cutting rates as much as the market expects.
“If a side effect of that is a more volatile bond market, we think there may be a risk that the relationship between bond yields and stock prices turns negative again. That would be consistent with what had been the dynamic coming out of the post-pandemic inflation surge — and unfortunately would confirm that the economy is still more prone to supply shocks,” he adds.
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Still, that does not mean that the market will struggle all year long, but the risks for volatility may be larger in 2025. “So, if anything, it’s about managing expectations around volatility and getting away from what has been the norm this year: limited significant drawdowns at the index level,” he says.
On the equities side, Charles Schwab notes that recent strong performance of cyclical stocks relative to defensive stocks points in the direction of a continued pick up in manufacturing activity. Conversely, if cyclicals were to begin underperforming defensives, it might suggest a stall in the hoped-for manufacturing recovery.
Kahling: "Shifts in investment trends are happening quicker than ever before, and with the constant flow of information readily available to investors all around the world, we all can react faster."
Grasping opportunities
To help clients capitalise on opportunities in this dynamic landscape, Charles Schwab recently announced plans to expand its 24-hour trading capabilities in early 2025.
Included in this expansion are equities from the tech-heavy NASDAQ 100, the broad-based S&P 500 and hundreds of additional exchange-traded funds (ETFs). “Especially for investors in Singapore — and the entire APAC region — it’s important to have the ability to manage your US equity portfolio on your terms during your waking hours because the investment landscape is constantly evolving,” says Kahling.
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In addition to extended-hours trading, Charles Schwab also offers US$0 commissions on online listed equities with no hidden fees, providing cost-effective access to the world’s largest financial market.
Year-to-date, S&P 500 Index is up about 23.3% as of end 2024. While this suggests a strong market performance, the headline figure masks significant turnover, with individual stocks fluctuating between winners and losers amid ongoing volatility.
Charles Schwab underscores the importance of diversification as a cornerstone of investing. The dominance of mega-cap stocks in the S&P 500 highlights the risks of concentration. “Investors should be concerned if a single stock accounts for more than 10% of their total stock investments,” Kahling adds. Diversification reduces vulnerability to market swings and enhances portfolio stability.
Data-driven decision-making is another pillar of successful investing. Charles Schwab’s thinkorswim® platform suite — available on mobile, web, and desktop — provides real-time insights and over 300 technical charts and indicators, enabling investors to make informed choices and manage their portfolios efficiently. Kahling notes that slowing down and relying on data rather than emotions is critical, especially during periods of uncertainty.
The platform also includes a robust educational component, with access to live-streaming news, weekly webcasts, market commentary, and on-demand learning materials. For example, Schwab Coaching offers over 30 interactive live webcasts each week, while its online Insights and Education platform provides tailored learning paths and hundreds of articles on personal finance and trading strategies. Specifically on the Schwab Singapore site, it offers a wealth of coaching tutorials that investors can attend live or opt to view on demand at their convenience. These initiatives are designed to empower investors of all experience levels.
Singapore accredited investors, or those who have the knowledge and experience to trade complex investment products, as well as high net worth investors (HNWIs) investing with Charles Schwab also benefit from the global scale of the firm’s services, coupled with tailored localised support. The firm boasts a local team in Singapore to offer in-person support and ensure expert expertise is readily accessible, complemented by experienced, multilingual, US-based registered investment professionals who are available to assist clients via calls or emails around the clock.
As Kahling says: “Our local team in Singapore is dedicated to serving accredited investors, drawing on over 50 years of industry leadership to help them tap into the liquidity, scale and opportunities of the US markets, wherever they may be, and achieve their financial goals through US investing.”
Find out more about Charles Schwab Singapore and its offerings at http://www.schwab.com.sg/
Disclosure
Standard online US$0 commission does not apply to over-the-counter (OTC) equities, transaction-fee mutual funds, futures, fixed-income investments, or trades placed directly on a foreign exchange or in the Canadian market. Options trades will be subject to the standard US$0.65 per-contract fee. Service charges apply for trades placed through a broker (US$25) or by automated phone (US$5). Exchange process, ADR, and Stock Borrow fees still apply. See the Charles Schwab Pricing Guide for Individual Investors for full fee and commission schedules.
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