International Outlook 2025: Focus on fundamentals
06 March 2025
Our international Outlook 2025 event took place last week at the JW Marriott Hotel in Nairobi, Kenya. Julien Lafargue, Chief Market Strategist, shared some fascinating insights into the factors shaping the current investment landscape. Below are Julien’s key takeaways for international investors in 2025.
Look through the noise
The current investment landscape has been a masterclass in narrative whiplash. From the initial buzz around DeepSeek’s AI advancements to concerns over escalating yields, tariff anxieties, and now whispers of a US growth slowdown, the market's focus has shifted with dizzying speed.
Yet amidst this flurry of headlines, the fundamental reality remains largely unchanged. This constant noise serves as a stark reminder that investors must resist the allure of fleeting narratives and anchor themselves in the bedrock of long-term, tangible value.
Focus on fundamentals
The real world, where businesses operate and economies evolve, moves at a more deliberate pace. While market sentiment can swing wildly based on perceived threats and opportunities, true value creation evolves over time. This is where professional investors must distinguish themselves. By focusing on fundamental analysis, understanding underlying business models, and assessing long-term growth potential, it is possible to filter out the noise and identify genuine investment opportunities.
This shift necessitates a more granular approach to investing, focusing on identifying companies with strong fundamentals, sustainable competitive advantages, and the ability to navigate the evolving market dynamics. By prioritising diligent research and a long-term perspective, investors may be better placed to navigate the shifting geopolitical sands and deliver consistent returns in a challenging environment.
Prepare for lower returns ahead
Looking ahead, investors should brace for a period of potentially lower market returns. The era of broad market-wide gains may be giving way to a more nuanced environment where returns are driven by astute stock and sector selection. The market needs to recalibrate to more realistic expectations, acknowledging that sustained, exponential growth is rarely a given.
The start of Donald Trump’s second presidency serves as a cautionary tale about the perils of inflated expectations. His initial promise of immediate sweeping change set an unrealistic bar, leading to inevitable disappointment and a subsequent decline in approval ratings. However, it was clear that he wouldn’t be able to deliver everything he said he would in the timeline he gave. Investors (and voters) are now gradually coming to this realisation, and the market has been adjusting to reflect this. One of the good things about lower expectations is that the probability of future positive surprises increases.
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