Everything Is Bigger in America

Supersize me! At your favorite fast-food joint, ordering the largest size might seem like a bold move - until you realize it’s impossible to finish. Everything really is bigger in America. And that includes, at the moment, stock market performance.

Picture this: an investor reveling in a stock market year with over 20% returns. She throws a pitying glance at Europe, limping along with 10%, and winces at France’s outright nosedive - a 3% loss!

But then, the rock of the financial world emerges. Once again, America pulls out the Ttrump card. Soaring financial markets, turbo-charged tech stocks, and a strong US dollar deliver a jaw-dropping 30% growth - in euros.

And suddenly, the euphoria fades. Disappointment spreads. Why don’t I have that? What do I need to do to get more?

More, more, more!

Gutmann already has 60% of its managed equities invested in the USA. Sounds like a lot? Not really - you might even call it conservative. Consider this: the US accounts for a hefty 74% of global stock market capitalization. Add in every other country with stock exchanges - even emerging markets - and it’s still 67% USA.

But it’s not just about geography. You need solid weightings in the big, household-name tech giants—the “Magnificent Seven” like Apple, Nvidia, and Tesla. The stocks with the biggest index weightings also delivered the best performances. Beating the index this year? That meant holding even more of the Magnificent Seven in your portfolio.

I’ll admit it—hindsight is 20/20, and yes, we’d have loved to own more of the year’s hottest performers. But that’s not how we operate. Our disciplined approach to broad diversification is designed to manage risk and maintain balance.

From the summit of a well-managed portfolio, it’s all blue skies and sunshine. But here’s the thing: now is exactly when caution is crucial. Trends can continue - but eventually, they reverse. Jumping on the bandwagon of yesterday’s winners? That’s a risky gamble.

Do I wish we had a crystal ball to predict the next 12 months’ top performers? Absolutely. But since the future remains a mystery, I’ll continue to champion discipline in investing.

The Gutmann investment strategy is broadly diversified across sectors, ensuring we don’t miss out on key trends. Sure, if a particular theme takes off, we might not top the leaderboard. But here’s the trade-off: when the tide turns, we won’t be at the bottom either.