Big as the U.S. stock exchange is, it isn't the only place to trade stocks. Markets in Europe, Asia and Latin America have been exceeding the U.S. market in 2025. The DAX index, which tracks 40 of Germany's most important stocks, was up nearly 15 percent for the year, led by Rheinmetall, Europe's biggest ammunition maker, with a gain, in 2025 alone, of 113 percent. Germany is rearming, a repercussion of President Trump's America First diplomacy, and a large expected increase in military costs is stimulating European stock markets.In the United States, President Trump's tariff policy, along with his stated willingness to bring on an economic downturn if that's needed to attain what he views as a greater great, has unclear businesses, investors and many economists. While couple of are predicting a domestic economic crisis right now, the chances of one have actually increased since of the uncertainty radiating from Washington.”The U.S. economy started 2025 performing well, with strong development, low and steady unemployment, and moderating inflation and rate of interest,”Mark Zandi, primary economic expert of Moody's Analytics, said in a note to clients this previous week.”But now, unpredictability and angst over an installing worldwide trade war and big shifts in other economic policies are doing significant financial damage, and recession risks are increasing. “Big Tech and Everything Else For financiers, these sudden problems in the United States highlight the advantages of diversity. The strategy is far from perfect:
It will not provide the very best possible returns at any given moment, but it can secure you from some of the effects of slumps in discrete markets or securities.Consider the overall return, consisting of dividends and interest, of a couple of crucial possession classes so far in 2025: The overall United States stock exchange, represented by the Dow Jones US Overall Stock Market Index(once referred to as the Wilshire 5000): Down 3.4 percent.World stock exchange outside the United States, as recorded by the MSCI ACWI ex USA Index: Up 6.5 percent.United States domestic financial investment grade bonds
, represented by the Bloomberg U.S. Aggregate Bond Index: Up 2 percent.Global investment-grade bonds, portrayed by the Bloomberg Global Aggregate Index: Up 2.1 percent.Money market funds and Treasury costs, for money holdings, as captured by the Bloomberg US Treasury Bill Index: Up 1 percent.What this tells us is that most of the world's essential monetary markets have been succeeding while the total U.S. stock exchange has stalled. And even within that U.S. market, it's paid to be diversified.
While huge tech business have been hit hard, most other stocks have actually held their own. Think about 2 exchange-traded
funds. The Roundhill Magnificent 7 E.T.F. separates the performance of seven U.S. tech highfliers of 2023 and 2024– Meta, Microsoft, Amazon, Apple, Nvidia, Alphabet and Tesla. It's down 12.3 percent this year. By contrast, the Defiance Big Cap ex-Mag 7 E.T.F. strips out the Magnificent 7 stocks, while supplying exposure to the other huge business in the U.S. market. It was up 1.1 percent. Source
