What does the second half of 2025 have in store for us?

June 2025 by Mario Pires

The last few months have been full of unusual decisions and setbacks in US trade policies, with changes that increase uncertainty for families and businesses. Investors are no exception and many react heatedly to these announcements. Driven by sentiment, they contribute to strong movements in the markets, which follow one another at the pace of decisions and retreats.

Only a crystal ball would help us guess what the second half of the year has in store for us, but the unpredictability that is currently marking the present day is likely to continue and several of its impacts are global. 

It is important, however, to understand that the falls caused in the markets have already been largely recovered. Historical data confirms that this is usually the case: that disruptive events such as the announcement of tariffs, September 11 or the invasion of Ukraine cause sharp but short-term declines and do not imply a complete reformulation of long-term investment strategies, supported by the factors that really matter – the fundamentals.

Furthermore, fears created by political or geopolitical issues may be less relevant for investment than their initial impact suggests and do not cancel out opportunities in the second half of 2025.

Six rules for navigating uncertainty

1. Calm: do not give in to impulsive and indiscriminate selling movements, which lead to losses, and take advantage of moments of decline to identify assets of companies that are unfairly undervalued by these disruptions. For example, falls of more than 10% in equity markets are common in most years, and despite the volatility, the European market is recording the best start to a year in more than half a century, compared to the US.
2. Long-term vision: Historical data confirms that persistence pays off, particularly in equity markets, which have outperformed other asset classes in the long term, despite experiencing more pronounced fluctuations in the short term. At the same time, it is important to maintain positions in sectors that, despite being penalized by the context, have structural growth potential.
3. Active and selective analysis: opportunities continue to exist across different regions, sectors and companies. Proactive and selective analysis is essential to identify geographies, areas and organizations less penalized by potential tariffs, such as those operating in more defensive areas (essential goods and services, for example) and responding to the major structural trends of deglobalization (proximity of production to supply), demographics (health and technologies, in view of the aging population and the reduction of the working population) and decarbonization (energy transition).
4. Focus on quality and resilience: Identifying companies with solid fundamentals, which maintain long-term plans, diversified distribution chains, efficient management and strong competitive positions is crucial to obtaining better risk-adjusted returns. Historical data shows that, more than global and local policies, it is the fundamentals of companies – and their ability to generate value – that are the main drivers of return.
5. Global diversification: The rule of “not putting all your eggs in one basket” advises a diversified portfolio to mitigate risks and enhance opportunities in sectors, geographies and asset classes with less correlation between them. Asset diversification should include analysis of all available asset classes - from stocks to government and corporate bonds, including high-yield debt and investment-grade credit, as well as commodities (gold is a safe haven in uncertain times, for example), currencies and private assets.
6. Active management: continuously monitoring economic and monetary indicators, as well as the behavior of markets and companies, and following major structural trends, to make strategic adjustments that help to obtain the best risk-return ratio.

It is not always easy for an investor to reconcile all these rules, but this is what experts at asset management companies, such as Schroders, do. Supported by analytical teams and tools, you have the information and flexibility to proactively explore opportunities (and mitigate risks) resulting from the reconfiguration of global trade or other disruptions that may arise in the second half of the year.