To bull or to bear? That is the question

Source: Trustnet

The world feels full of doom and gloom at the moment. Domestically there are concerns that the upcoming Budget will squeeze already hard-hit Britons, with more tax grabs from a government that is trying to fill a void in its public finances.

Internationally, the geopolitical mess of 2025 continues. Recent weeks have shown that the US-China trade war is not yet off the table, with US president Donald Trump re-threatening a tit-for-tat measures before backing down.

Meanwhile, there are political issues in France and Japan, where new prime ministers will need to address issues that forced their predecessors to resign.

Fans of the great US investor Warren Buffett could view this as a positive sign, citing his oft-used quote to be ‘fearful when others are greedy’ (and greedy when they are fearful).

The problem is that it does not feel like markets are doing much of either. While many remain high on artificial intelligence, few argue that the top US tech stocks are cheap.

Earlier this year, investors pivoted from the US to Europe, with the Eurostoxx index currently the best-performing major market. However, there are now rumblings that the trade is done, as the move tended to benefit large-cap names that have become expensive.

The UK remains unloved, but few are optimistic about the potential for strong gains from a market that is full of old economy stocks that lack growth. And even those who invest for income are out of luck, with data from the Computershare Dividend Monitor this week revealing that dividends are likely to be lower than previously expected.

Emerging market bulls will point to the strong performance of India and the rebound in China, while the bears will state the former is overvalued and the latter is too volatile to trust.

It is not just equities where this phenomenon exists. Bears have rushed to gold, pushing its price well above $4,000 – a level that would have surprised even the most ardent fan of the precious metal at the start of the year. If running for safety, this seems like an inopportune time to buy into the precious metal.

In the fixed income space, bond manager are mixed on whether to be long or short duration. Lower interest rates should benefit those at the longer end of the curve, but there is little confidence that central banks will cut at pace.

On the corporate side, credit spreads remain tight, meaning investors are taking on more risk with minimal upside relative to government bonds and even cash.

Whichever way you lean, there have been articles this week on Trustnet that will interest you. For the pessimists, we have looked at how to value the ultimate defensive asset of gold, whether savers are better off in a cash ISA or a regular savings account (for those unwilling to invest) and the best defensive assets to own if the global economy falls apart.

For the optimists, the perfect portfolio for someone who wants 100% equity exposure and the top fund managers’ favourite 'Magnificent Seven' stock picks might fit the bill.

Lastly, for those on the fence, the best emerging market funds in both up and down markets and the UK funds with low correlation to one another, give a blend of options for investors to consider.

If not evident, we have no idea how the market will play out from here. But we will keep giving investors of all types options and opinions to make the best choice possible.