What is happening to markets in 2025?
Personal finances
3.11.2025 5:26 PM
If your portfolio has been suffering these weeks, you're not alone. Uncertainty has gripped markets and many investors are wondering what to do: buy, sell or wait?
That's why, at Hapi, we want to tell you, in the clear and direct way you already know, what's essential for you to make informed decisions and strengthen your path to a better financial future.
On January 20, 2025, Donald Trump assumed his Second term. His election came with a lot of optimism for greater freedom for companies and lower taxes thanks to Elon Musk with DOGE (Department of Government Efficiency) and a pro-crypto stance. At the same time, it was known about his strong international policy in which he was going to be confrontational with tariffs and his quest for an end to wars.
What happened was that these major changes occurred at a pace and magnitude that the market did not expect. La imposition of tariffs of 25% to Mexico and Canada and 10% to China, together with similar measures against the European Union, is raising fears about their economic consequences among investors. In turn, they have Little clarity about the road of reduced public spending, the large American public debt and the cuts in international aid, with which in recent days fears of recession have arisen.
At this point, it's important that you understand a key concept: The tariffs or rates. In this context, these are imposed on certain international producers for selling their products in the United States. Basically, they are applied seeking to protect domestic production from the entry of foreign products at lower costs.
For example, if you put a new 25% tariff on a product that cost $100, then the government will keep $25. In this way, the government receives revenues, and the international company is harmed. However, in that process, companies pass on these additional costs to consumers, resulting in higher prices and a potential reduction in purchasing power.
Not only consumers are harmed, but also domestic companies that used imported products, because it causes their costs to rise and their profit margins to fall.
Markets reject uncertainty. The combination of tariffs, inflation and potential trade retaliation has generated fear among investors, who have chosen to move to safer assets.
If prices rise, companies' production costs may increase, household spending may fall, and as a result, the economy could be harmed.
In addition, other economies are taking a similar approach and are imposing return tariffs on Americans, temporarily limiting international trade.
With these factors, many investors took a more conservative approach, waiting before continuing to invest or moving to defensive sectors such as commodities, health, public services or non-cyclical consumption, rather than stocks in growth sectors such as technology.
For that reason, the S&P 500 has fallen -9.5% from its peak; and the Nasdaq 100, -12.7%.
In the face of so much noise in the media, it is important to see what the fundamentals of the economy, companies are and what lessons history can leave us.
The key variables to know the trajectory of the economy are the Gross Domestic Product (GDP), inflation and unemployment. Other measures, such as consumption or investment, are also important.
If we look at these variables, it doesn't look like a recession is on the way, although everything will depend on the real impact of the new measures.
In the case of firms It's important to see your growth in sales and profits and how it compares to analysts' expectations.
Despite recent volatility and high multiples, companies continue to grow in sales, improve their operational efficiency and increase their profits, suggesting a solid base for the long-term market.
This is Trump's second term. In its first term, the S&P 500's performance was close to 68%. In international politics, he had a similar approach, although he took longer to implement it.
Historically, Trump has used tariffs as a negotiating strategy, suggesting that these levels may not be permanent. In his first term, he implemented similar trade policies, but eventually reached agreements, such as the USMCA (formerly NAFTA) in 2018.
On the other hand, despite the changes in policy and financial crises of the last 20 years, including the 2008 Financial Crisis, trade wars with China, the COVID-19 pandemic and many other difficulties, the market had a Average annual return of 11.8%.
While the market has gone through Big falls and bearish periods (Bear Markets), history shows that those who invest consistently and with a long-term vision have benefited the most.
Historical examples:
The lesson is clear, the market has always recovered. In the long term, patience and consistency are key. What do you do in the falls: do you get scared or do you take advantage of opportunities?
Las market crashes are common in business cycles. While it can be painful, particularly when you're starting out, they're also an opportunity to buy stocks and ETFs at a discount. It is those who continue to invest progressively during crises, who see significant growth in the long term. By keeping your investments for several years, you benefit from the growth of company profits over time, despite short-term movements.
Think about grocery shopping, we usually look for deals, because they are opportunities to buy what we need at the lowest price. Under that reasoning, declines would be opportunities to buy more, not less.
Another strategy to not be frightened by the ups and downs of the stock market is to invest with the Dollar-cost averaging (DCA). It involves periodically (monthly, quarterly or annual) investing an equivalent amount in your Hapi account, so that the investor can take advantage of the upward trend of the market in the long term. Thus, the average price of your investment will be more attractive, as you take advantage of the declines to your advantage.
The words of famous investors like Warren Buffett, Baron Rothschild and Peter Lynch are very inspiring in times of bear markets.
This countercyclical approach has many investors growing their wealth by buying when the market is down and harnessing the power of compound interest.
Some more conservative people may choose to take a more conservative approach diversified, to reduce the volatility and risk of their portfolios and to have access to sectors Defensive such as health, public services and basic consumption. In this way, when some sectors fall, others rise, favoring the stability of your portfolio.
In addition, taking an in-depth look at the companies in your portfolio and upcoming investments tends to be a great tool for long-term investing. Searching for businesses with competitive advantages, with good future prospects and at attractive prices is Warren Buffett's approach, known as Value-Investing, and is an alternative for many in bear markets.
Market declines can be terrifying, but they also represent opportunities for those who are prepared. Throughout history, patience and long-term vision have been the keys to investor success. Although the current uncertainty with the new U.S. tariff and economic policies has generated volatility, the fundamentals of the economy and companies remain strong.
So what to do? Stay calm, keep learning and consider taking advantage of strategies such as Dollar-cost averaging, diversification and investment in quality companies. Remember that big investors have built their wealth by buying in times of uncertainty and letting time work its magic.
Don't let fear define your strategy. The stock market is not a short-term bet, but rather a marathon in which patience and discipline make the difference. And at Hapi, we're here to help you walk the path with clear information and effective strategies.
Invest in the U.S. stock market from Latam
Invest in stocks, ETFs, and crypto, and build your financial future with a simple and reliable tool.
Join now
Member ofFINRA and SIPC
All investments involve risk, including the loss of capital. Hapi offers self directed investment accounts for those investors who feel comfortable managing their own investments. For a full list of our disclosures, please visit our disclosures page.