In this issue, we explore the recent dominance of U.S. equities - particularly the extraordinary performance of the 'Magnificent Seven' tech firms - and assess whether this trend reflects a resilient economic reality or a potentially risky illusion. The analysis highlights how U.S. stocks have significantly outperformed global peers over the past decade - driven by strong earnings and rising valuations. However, it cautions that this period of 'exceptionalism' may not be sustainable - pointing to geopolitical risks, fiscal imbalances, and intensifying global competition.
It won't surprise you to hear that we conclude - rather than trying to predict the continuation of U.S. outperformance, investors may be better served by maintaining a diversified, systematic investment approach - one that avoids market timing and reflects the collective intelligence of global markets.
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