January is ending and our nerves have already had their fair share of rollercoasters. The “Trump shock” has been front and center from day one, with repeated salvos on the dollar, tough talk on trade and now the nomination of Kevin Warsh to lead the Fed. All the ingredients of an institutional soap opera are in place: a highly interventionist president on monetary matters, a future central bank head with a strong profile, and, in the background, the sensitive question of Fed independence. It is reasonable to expect markets to trade in sync with Senate hearings, media leaks and conflicting statements, triggering frequent bursts of volatility in the dollar, rates and, by extension, equities.
In this more unsettled environment, we remain constructive for 2026. Our base case still assumes positive global growth, gradually easing inflation and central banks that, in our view, will need to turn more accommodative as the year progresses. Political shocks are likely to cause regular bumps along the way, but they do not, at this stage, undermine the underlying trend in favor of risk assets. Rather than stepping away from markets, we are adjusting our positioning to better absorb these swings.
Practically, we have reduced US dollar exposure, which we see as more vulnerable in this new regime, and increased the weight of Swiss francs to stabilize portfolio value. We have also raised our cash buffer not out of excessive caution, but to have real ammunition available in the event of a correction. In a market dominated by bouts of nervousness and a persistent “buy the dip” mentality, being able to deploy capital when pullbacks create more attractive entry points is essential.
We have also chosen to diversify portfolios further beyond the United States. In Europe, our focus is on potential beneficiaries of a large‑scale German stimulus, which could support investment, industry, and the energy transition across the region. The UK and Latin America are not major allocations, but they play a complementary role: their markets, rich in miners, energy names and financials, provide targeted exposure to sectors we view as natural satellites of the AI revolution, supplying the energy, raw materials and capital that underpin this transformation. This diversification helps reduce reliance on a narrow group of US growth leaders while remaining aligned with our key long‑term themes.
Looking ahead to February, we remain cautious but optimistic. The relative softness of several major US sectors, such as Financials and Healthcare, likely limits the immediate upside for the broad indices and argues for a month that could be choppy and uneven. Even so, as long as key technical levels hold, we believe a gradual move toward new highs remains achievable into late February, in an environment where pullbacks should continue to offer opportunities to add selectively rather than signals to head for the exits.
