Darius recently joined Charles Payne on Fox Business to discuss the potential impact of President Trump’s economic agenda on asset markets, the importance of observing the market rather than predicting it, and more.

If you missed the interview, here are the three most important takeaways fromthe conversation that have implications for your portfolio:

1) How Will President Trump’s Economic Policies Broadly Impact Markets in 2025?

When assessing the impact of President Trump’s economic agenda, both positive and negative effects on the economy and asset markets are likely.

Specifically, factors such as tariffs, securing the border, and a hawkish shift in Treasury net financing (i.e., less bills + more coupons) are likely to contribute negative supply shocks to the economy and asset markets. Conversely, tax cuts, deregulation, and accelerated energy production could generate positive supply shocks.

Investors should closely monitor the size, sequence, and scope of these policy changes, as they will play a crucial role in shaping asset markets throughout 2025.

2) What is The Likely Impact of Tariffs on Asset Markets?

Although many Wall Street investors cite the Smoot-Hawley example when discussing tariffs, we believe anchoring on that scenario is misguided. The real impact lies in the currency market. China is likely to respond to fresh tariffs by significantly devaluing the yuan, which carries profound implications for global asset markets. Historically, when China devalues the yuan, other major economies follow suit with sympathy devaluations to maintain competitiveness, resulting in a much stronger U.S. dollar.

If a similar pattern emerges in 2025, this would likely lead to a reduction in global liquidity, which is problematic for asset markets in the context of the global refinancing air pocket that may develop later this year.

3) Should Investors Focus On Observing The Market Rather Than Predicting It?

In short, yes. Our number one piece of advice for every investor is: Listen to what the market is telling you. Because asset markets trend far more frequently than they experience changes in trend, it is always best to align your portfolio with what the market is trying to price in, not against it. The trend is your friend.
Whether we are in an inflationary or deflationary environment, the most consistently successful strategy across all market conditions is trend following.

To successfully remain on the right side of market risk, investors must rely on signals from proven risk management systems (e.g., KISS and Dr. Mo) far more than their gut feel, emotions, or understanding of company or economy fundamentals.

Since our bullish pivot in January 2023, the QQQs have surged 81% and Bitcoin is up +328%.

If you have fallen victim to bear porn and missed part—or all—of this rally, it is time to explore how our KISS Portfolio Construction Process or Discretionary Risk Management Overlay aka “Dr. Mo” will keep your portfolio on the right side of market risk going forward.

Thousands of investors around the world confidently make smarter investment decisions using our clear, accurate, and affordable signals—and as a result, they make more money.

If you are ready to learn more about how our clients incorporate macro into their investment process and how you can do the same, we invite you to watch our complimentary 3-part macro masterclass.

No catch, just macro insights to help you grow your portfolio—our way of saying thanks for being part of our global #Team42 community of thoughtful investors.

Best of luck out there,
— Team 42