Tariff Toys, gold and a market on sale
By Holly Mackay, Founder & CEO
14 Mar, 2025
I heard a collective gasp of horror in the States yesterday, as Trump threw more Tariff Toys out of the financial pram. This time, he is outraged by the ‘nasty’ tariff on whisky imposed by the EU.
If this is not removed immediately, he will place a 200% tariff on “all wines, champagnes and alcoholic products coming out of France and other E.U. represented countries” which “will be great for wine and champagne businesses in the U.S.” French producers will feel a much deeper sense of Gallic outrage by the claim that champagne is produced in the States, than they will about the tariffs.
Not only are urban Democrats trading in their Teslas, they're now weeping at the prospect of celebrating life’s successes and birthdays with a Bud Light. This is how middle-class riots start.
Most of us will have felt the financial blow this week, as stock markets around the world have slumped and seas of red flash up on our screens. I should have just stayed in bed this week – I reckon I’m about 4% down since markets opened on Monday.
The main index in the States – the S&P 500 – closed 1.4% lower on Thursday, formally marking what is known as a ‘correction’. In other words, a slump of more than 10% since the record highs set in February. The tech-focussed Nasdaq fell by 2%, continuing the gloom of the last month. At the same time, gold surged to new highs as investors seek what are seen as safer assets at a time of huge global tension.
The BlackRock Gold & General Fund (which I don’t own, but mostly invests in large North American gold miners) is up about 47% in the last 12 months. Or, if you want to actually own some of the shiny stuff, the Royal Mint has an online service (the Vault) and stores it for you, so you don’t have a hernia because there’s a gold ingot stuffed at the back of the bookshelf. Great service, fab idea, terrible website, but I can live with that!
Newer investors who haven’t seen this sort of market reaction before will be feeling a bit sweaty. So, here’s a different take. Imagine you wanted to buy something pricey, but good quality. A Le Creuset saucepan, a Jaeger coat, a Specialized mountain bike. Would you feel better if you bought it at full price or in a sale? Compared to previous months, the US stock market is on sale. I can’t guarantee there won’t be further reductions, but these falls are par for the course, and if you have a long-term horizon, just ride it out.
If I look at activity on the main platforms, I can see that many investors are in fact taking advantage of the falls to buy some more shares – for example, on AJ Bell this week over 15% of the shares bought were Tesla and Nvidia. But it’s certainly not a consensus – about 7% of all the shares sold were Nvidia too.
The losses have been felt across most popular funds. The best-selling fund on all of the major platforms we track in February was Fidelity Index World. That is down by about 9% over the last month. Another bestseller, the Legal & General Global Technology Index, is down about 14% over the month. And the Vanguard US Equity Index fund, a bestseller on ii, is down about 12%.
Over in Investment Trust land and there are some less common names making an appearance. I was struck by Temple Bar, which invests in the FTSE 350. Six months ago this would have been like wearing flares in the 1980s, but now it’s cool – up by 1.4% over the last month with companies like Barclays, Shell, ITV and Anglo American. This makes the case for why people in finance bang on and on about diversification.
You can see all the best-selling funds, Investment Trusts and ETFs for February here. For those of you with shorter timeframes who want to sit in cash right now (or keep a portion in cash), we’ve a new feature piece on the best Cash ISA rates.
Talking of cash, Monzo went live with their accounts for under 16s yesterday and I signed up for my daughter – super easy to do and free of charge, unlike some competitors. And finally, if you’re approaching retirement, we’ve partnered with AJ Bell to bring you this piece on how you might want to tweak your portfolio in preparation.
Have a great weekend everyone. I'm manifesting Spring, hence freezing as I refuse to bring out my winter coat again. Come on, sun!!!
Holly
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