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Stock Market Woes Are Only Beginning: Discover How We're Undermining Global Economic Growth

Unknown equities, financial markets, investors, news, stocks

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 The stock market was slumping after President Donald Trump made his
 tariff announcement
 To put it plainly, things were even more dire than investors had anticipated, and now they must determine the implications for stock prices for the remainder of 2025.


 On Wednesday, during the "Freedom Day" celebration at the White House Rose Garden, President Donald Trump declared reciprocal tariffs. He stated that a base tariff of 10% would apply universally; however, specific nations would also face extra "reciprocal" duties. These new taxes seem to add onto previously mentioned levies for automobile imports and from China. As anticipated, car imports will incur a tax rate of 25%.


 The SPDR S&P 500 exchange-traded fund decreased by 2.2% during post-market hours. It appears that the reciprocal tariffs along with the 10% base tariff might be responsible for this decline. Additionally, the Roundhill Magnificent Seven ETF fell by 2.4%.


 "President Trump has concluded his tariff address at the White House, and according to Wedbush analyst Dan Ives, these new tariffs are 'even worse than what the market had anticipated as the worst-case scenario,' " he notes.


 There is cause for optimism. The S&P 500 has dropped approximately 8% from its recent peaks, encapsulating much negative information. Should conditions improve on Thursday, investors ought to monitor the 5750 mark during an upturn. Surpassing this threshold "would definitely bolster the argument that the most severe part of the correction may have passed," according to experts.
 Jason Browne
 , who leads the Texas-based investment advisory firm Alexis Investment Partners, expresses optimism that Wednesday signifies the market moving beyond "peak uncertainty."


 However, the drawback is also significant, with 5500 possibly serving as the next support level. Regardless, the announcement indicates that volatility is here to stay, according to
 Venu Krishna
 The chief U.S. equity strategist at Barclays has noted several uncertainties following tariff implementations, including potential retaliations, rising inflation levels, shifts in consumer expenditure patterns, and changes in industrial output figures. Recently, Krishna revised downward his forecasted earnings per share for the S&P 500 in 2025 from $271 to $262 and continues to scrutinize various situations that might erase all projected profit increases anticipated for 2025.


 Krishna remains optimistic regarding large technology stocks despite the current climate. The price-to-earnings (PE) multiples for companies like Apple, Amazon.com, Alphabet, Meta Platforms, Microsoft, and Nvidia have dropped to around 24 times their earnings, which represents a decline of approximately 25% from their most recent high point at 32 times. This makes the tech industry an attractive refuge. According to Krishna, as long as technological profits keep expanding, "where better could one seek shelter should circumstances deteriorate?" he questions pointedly.


 However, they aren’t performing well during after-hours trading. Apple has seen a drop of 6.1%, Amazon.com is down by 5.1%, Alphabet has decreased by 3.3%, fell by 4.6%, Microsoft has slipped by 2%, Nvidia’s value has reduced by 4.9%, and Tesla has plummeted by 5.8%.


 Apart from sector rotation, some Wall Street analysts remain cautiously upbeat even with the decline on Wednesday. "We should avoid completely avoiding risks or moving entirely to cash strategies that limit potential gains," states Arnim Holzer, Global Macro Strategist at Easterly EAB Risk Solutions.


 Nevertheless, the likelihood of things going terribly awry remains substantial, as Holzer admits. He characterizes this situation as a "fabricated emergency," implying that it could either be swiftly resolved or escalate further.


 Mutual tariffs provide opportunities for discussions yet they also pave the way for increased suffering and unpredictability, states Adam Hetts, who leads multi-asset strategies globally at Janus Henderson Investors. "The imposition of substantial duties on an individual nation-to-nation level indicates 'a negotiation strategy,' keeping investors edgy indefinitely," he notes. "Despite witnessing this administration’s unexpectedly robust endurance against market distress, the crucial issue remains: How far can their resilience stretch when faced with genuine economic hardship during these talks?"


 Up until now, the impact has primarily affected sentiment indicators; however, this situation could evolve. As Nigel Green, CEO of deVere Group, articulates, "This is how you undermine the global economic powerhouse while professing to boost it." Trump is dismantling the post-World War II framework that contributed significantly to prosperity for both the U.S. and the globe, all executed with an audacious sense of assurance.


 A quality that appears to be missing at present.


 Send your letter to Al Root
 allen.root@dowjones.com

Stock Market Woes Are Only Beginning: Discover How We're Undermining Global Economic Growth

Unknown equities, financial markets, investors, news, stocks

The stock market was slumping after President Donald Trump made his tariff announcement To put it plainly, things were even more dire than investors had anticipated, and now they must determine th…

Would I buy Pilbara Minerals shares today?

Unknown equities, investing, investing company news, investors, stocks

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 The
 ASX lithium share
 
 Pilbara Minerals Ltd
 
 (
 ASX: PLS
 ) has suffered a very painful decline in recent times. It has dropped by 52% in the last year alone, as the chart below shows.


 It's important not to anchor our thoughts back to previous share price levels. Just because it was at $5 a couple of years ago doesn't mean it's destined to get back there any time soon. However, it doesn't need to recover to $5 to make great returns from here.


 A recovery back to $3 would mean capital growth of more than 60%. Let's consider whether the ASX lithium share is capable of producing good returns and whether it's a buy.


 There's one thing that investors need to pay attention to the most, in my view.

<h2 class="wp-block-heading" id="h-volatile-lithium-price">
 
 Volatile lithium price
 
</h2>

 The lithium price is now a fraction of what it was a couple of years ago.


 In the
 FY25 first-half
 , the business reported that its average lithium sold price was US$668 per tonne, down 58% compared to what it achieved in the first half of FY24.


 As a commodity business, the company's production costs don't change much between results. Therefore a fall in the revenue per tonne leads to a significant decline in profit.


 It reported that operating profit (
 EBITDA
 ) fell 89% to $48 million, and it saw a 132% plunge of statutory
 net profit after tax (NPAT)
 to a loss of $69 million. Profit generation is obviously integral for most businesses, including Pilbara Minerals shares.


 However, there was one positive related to the lithium price. Pilbara Minerals experienced a 3% rise of the realised price to US$700 per tonne for the three months to December 2024 compared to the three months to September 2024 where the realised price was US$682 per tonne.


 Any increase in the commodity price is very useful for the business because of the positive effect of operating leverage.

<h2 class="wp-block-heading" id="h-solid-long-term-industry-dynamics">
 
 Solid long-term industry dynamics
 
</h2>

 The elevated Pilbara Minerals share price from a couple of years ago was due to investor optimism on how much lithium demand could grow in the longer-term. While the short-term is challenging, the company still points to a promising long-term outlook.


 The ASX lithium share pointed out in its HY25 result presentation that there were 1.3 million electric vehicle sales in January, representing 18% year-over-year growth.


 Pilbara Minerals cited research that showed electric vehicle (EV) sales are forecast to grow by 19% year over year in 2025. EV sales could increase at a
 compound annual growth rate (CAGR)
 of 17% to 2030.


 Overall, lithium demand is expected to increase by around 2.5x by 2030 at a CAGR of around 16%.


 Pilbara Minerals management said:

<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 
 [The] Lithium market has historically demonstrated periods of pricing volatility. This pricing volatility has translated to wide variations in investment levels into the industry. This pattern has the potential to continue until the industry is further matured.
 
</blockquote>
<h2 class="wp-block-heading" id="h-my-2-cents-on-pilbara-minerals-shares">
 
 My 2 cents on Pilbara Minerals shares
 
</h2>

 The business is clearly going through a rough period. It's difficult to know what's going to happen next, though it was promising that the latest reported quarter saw an increase in the lithium price.


 If the lithium price can continue increasing, then the Pilbara Minerals share price could be materially undervalued.


 With a lower lithium price, additional global lithium production growth may have slowed enough to materially help the future
 supply and demand
 dynamics, providing support for the lithium price.


 It's a higher risk idea, but I think the ASX lithium share could be an opportunistic buy today. However, a recovery would take a while and I wouldn't bet the house.


 The post
 Would I buy Pilbara Minerals shares today?
 appeared first on
 The Motley Fool Australia
 .

<div class="pitch-snippet">
 <h2>
 Should you invest $1,000 in Pilbara Minerals Limited right now?
 </h2>
 
 Before you buy Pilbara Minerals Limited shares, consider this:
 
 
 Motley Fool investing expert Scott Phillips just revealed what he believes are the
 
 5 best stocks
 
 For investors looking to purchase at this moment... Pilbara Minerals Limited was not among those recommended.
 
 
 The online investment service he has been running for over ten years, Motley Fool Share Advisor, has offered thousands of subscribers stock recommendations that have doubled, tripled, or even greater in value.*
 
 
 Right now, Scott believes there might be five stocks that could make for even better purchases.
 
 
 See The 5 Stocks
 
 *Returns as of 6 March 2025
 
 
</div>

 
 More reading
 

<ul>
 <li>
 These are the 10 most shorted ASX shares
 </li>
 <li>
 3 smart ASX shares to buy and hold for the next decade
 </li>
 <li>
 Why Atlas Arteria, James Hardie, New Hope, and Pilbara Minerals shares are falling today
 </li>
 <li>
 Got $2,000 to invest? These ASX shares could rise 30% to 60%
 </li>
 <li>
 These are the 10 most shorted ASX shares
 </li>
</ul>

 Motley Fool
 contributor
 Tristan Harrison
 has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a
 disclosure policy
 . This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Would I buy Pilbara Minerals shares today?

Unknown equities, investing, investing company news, investors, stocks

The ASX lithium share Pilbara Minerals Ltd ( ASX: PLS ) has suffered a very painful decline in recent times. It has dropped by 52% in the last year alone, as the chart below shows. It's i…

Q&A: What Sets Multi-Asset Allocation Funds Apart From Equity Funds in India?

Unknown equities, investing, investment strategies and advice, mutual fund investement strategies and advice, mutual funds

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<h2>
 Q. My wife and I have been investing in an equity mutual fund for the past 7 years. We now intend to diversify. Many of our acquaintances have suggested that we invest in the hybrid mutual funds category. Can you please elaborate on multi-asset allocation funds, the pros and cons of investing in them and how multi-asset allocation funds are different from equity mutual funds.
</h2>

 
 Vikrant Sharma, New Delhi
 

<h2>
 What are multi-asset allocation funds?
</h2>

 Multi-asset allocation funds are hybrid mutual funds that invest in at least three different asset classes, with a minimum allocation of 10% in each asset class. Typically multi-asset allocation funds invest in equity, debt, and one additional asset class such as gold, real estate, or commodities. These funds aim to provide investors with a diversified portfolio that can balance risk and return more effectively than investing in a single asset class.


 Before we deep dive into multi-asset allocation funds it is important to understand what hybrid mutual funds category is, of which multi-asset allocation fund is a sub-category.

<h2>
 What are hybrid mutual funds?
</h2>

 Hybrid mutual funds, often referred to as balanced funds, are mutual funds that combine a mix of equity, debt, and sometimes other asset classes like commodities or real estate. The primary objective of hybrid
 mutual funds
 is to achieve a balance between growth and income while managing the risk associated with market volatility.


 By diversifying across different asset classes, these funds aim to provide investors with a more stable investment experience compared to pure equity or debt funds.


 The allocation of assets within a
 hybrid mutual fund
 can vary widely, with some funds maintaining a fixed ratio of equities to bonds, while others may actively adjust their allocations based on market conditions and economic outlook. This flexibility allows fund managers to capitalise on market opportunities and mitigate risks.


 Hybrid mutual funds are suitable for investors who seek a diversified investment approach without the need to manage individual investments actively. These funds can be an excellent choice for long-term goals such as retirement planning, as they offer the potential for capital appreciation and regular income.

<h2>
 Advantages of multi-asset allocation funds
</h2>

 There are multiple benefits of investing in multi-asset allocation funds, we have listed down below the key benefits of multi-asset allocation funds.


 
 Diverse asset mix:
 
 At the heart of multi-asset allocation funds is the principle of diversification. These funds invest across a range of asset classes, including equities, bonds, real estate, commodities, and cash equivalents. By spreading investments across different assets, these funds reduce the impact of poor performance in any single asset class on the overall portfolio, enhancing stability and minimising risk.


 
 Dynamic asset allocation:
 
 One of the defining features of multi-asset allocation funds is their flexibility in adjusting asset allocations based on market conditions, economic trends, and investment objectives. Fund managers actively monitor the financial landscape and make strategic shifts to capitalise on opportunities and manage risks. This dynamic approach allows for a more responsive and adaptive investment strategy, tailored to changing market environments.


 
 Risk management:
 
 A key advantage of multi-asset allocation funds is their ability to manage risk effectively. By diversifying across various asset classes, these funds can balance the inherent risks associated with each asset.


 For instance, while equities offer growth potential, they come with higher volatility. Bonds, on the other hand, provide more stability but may offer lower returns. By combining these assets, multi-asset allocation funds can achieve a more balanced risk-return profile, making them suitable for a wide range of investors.


 
 Income generation and capital appreciation:
 
 Multi-asset allocation funds aim to deliver both income generation and capital appreciation. By including income-generating assets such as bonds and real estate alongside growth-oriented equities, these funds can provide a steady stream of income while also seeking capital growth. This dual objective makes them particularly appealing for investors looking to achieve long-term financial goals, such as retirement planning.


 
 Professional management:
 
 Investing in multi-asset allocation funds means entrusting your portfolio to experienced fund managers who possess in-depth knowledge of various asset classes and market dynamics. These professionals employ sophisticated investment strategies, rigorous research, and continuous monitoring to optimise asset allocation and performance. For investors seeking a hands-off approach, professional management offers peace of mind and the potential for enhanced returns.


 
 Accessibility and convenience:
 
 Multi-asset allocation funds offer a convenient and accessible way for investors to diversify their portfolios without the need to manage multiple individual investments. With a single investment, investors can gain exposure to a broad range of assets, reducing the complexity and effort required to maintain a diversified portfolio. This accessibility makes these funds an attractive option for both novice and seasoned investors.


 
 Alignment with investment goals:
 
 Multi-asset allocation funds can be tailored to suit various investment goals and risk tolerances. Whether an investor is seeking conservative income, balanced growth, or aggressive capital appreciation, there is likely a multi-asset allocation fund that aligns with their objectives. This customisation ensures that investors can find a fund that matches their unique financial goals and preferences.

<h2>
 Cons of multi-asset allocation funds
</h2>

 Investing in any kind of market-linked investment is not risk-free. Some of the key risk associated with investing in multi-asset allocation funds are as follows:


 
 Potentially moderate returns:
 
 Multi-asset allocation funds often strive to strike a balance between the high-growth potential of equities and the stability of bonds. However, this balance can sometimes result in moderate returns. Unlike pure equity funds, which can capitalise on significant stock market gains, multi-asset allocation funds may miss out on these opportunities due to their bond holdings. Similarly, during periods of rising interest rates, the bond component of hybrid funds may underperform, further limiting returns.


 
 Higher expense ratios:
 
 Multi-asset allocation funds typically involve active management, which can result in higher expense ratios compared to passive index funds or pure equity or debt funds. The need for constant rebalancing and asset allocation decisions by fund managers contributes to these higher costs. Over time, these expenses can erode the overall returns for investors, making it crucial to consider the fee structure before investing.


 
 Market timing risks:
 
 The success of a hybrid mutual fund largely depends on the fund manager's ability to make timely asset allocation decisions. If the manager fails to predict market trends accurately, the fund's performance can suffer. For instance, an incorrect allocation towards equities during a market downturn can lead to significant losses, while an overly conservative approach during a bull market can result in missed opportunities for capital appreciation

<h2>
 Who should invest in multi-asset allocation funds?
</h2>

 Multi-asset allocation funds have gained popularity among investors seeking a balanced and diversified approach to investing. We have mentioned the key categories of investors who should invest in
 multi-asset allocation funds
 .


 
 Investors avoiding high risk:
 
 Investors trying to avoid high-risk pure equity mutual funds can benefit from multi-asset allocation funds due to their balanced risk-return profile. By spreading investments across different asset classes, these funds help mitigate the impact of volatility and reduce the overall risk of the portfolio. For individuals who are cautious about market fluctuations and prefer a more stable investment approach, multi-asset allocation funds offer a compelling option.


 
 Long-term investors:
 
 Multi-asset allocation funds are well-suited for long-term investors who have a time horizon of several years or more. These funds aim to deliver both income generation and capital appreciation, making them ideal for long-term financial goals such as retirement planning, education funding, or building a nest egg. The dynamic asset allocation strategy of these funds allows for adjustments based on changing market conditions, enhancing the potential for sustained growth over time.


 
 Busy professionals and individuals with limited time:
 
 For busy professionals and individuals with limited time to actively manage their investments, multi-asset allocation funds offer a convenient and efficient solution. The professional management experienced fund managers ensure that the portfolio is continuously monitored and adjusted to optimise performance. This hands-off approach allows investors to focus on their careers, families, and other priorities while still benefiting from a diversified investment strategy.

<h2>
 Performance and returns
</h2>

 Most mutual funds in India offer multi-asset allocation funds schemes. Below we have listed the top 5 multi-asset allocation funds based on their past 5-year return (CAGR). As one can see, the top five funds in case of multi-asset allocation funds are north of 14%.


 
 Note: All data obtained from AMFI website as on 3 March 2025
 


 
 Past returns are not indicative of future performance.
 

<h2>
 Key factors to consider before investing in multi-asset allocation funds
</h2>

 Investing in multi-asset allocation funds can be an excellent way to diversify your portfolio and achieve a balanced risk-return profile. However, before diving into multi-asset allocation funds, it's essential to consider several key factors that can influence your investment experience and outcomes.


 
 Investment objectives:
 
 The first and foremost factor to consider is your investment objectives. Determine your financial goals, such as capital appreciation, income generation, or a combination of both. Multi-asset allocation funds can be tailored to suit different objectives, so it's crucial to choose a fund that aligns with your specific goals. Understanding your objectives will help you select the right fund that matches your risk tolerance and time horizon.


 
 Risk tolerance:
 
 Assessing your risk tolerance is vital when investing in multi-asset allocation funds. These funds offer a diversified approach to managing risk, but they still carry varying levels of risk depending on their asset allocation. Some funds may have a higher proportion of equities, making them more volatile, while others may focus on fixed-income securities for stability. Evaluate your comfort level with market fluctuations and choose a fund that fits your risk profile.


 
 Asset allocation strategy:
 
 The asset allocation strategy of a multi-asset allocation fund plays a significant role in its performance. Funds can have different approaches to asset allocation, such as static allocation, tactical allocation, or dynamic allocation. Static allocation maintains a fixed ratio of assets, while tactical and dynamic allocation adjusts the asset mix based on market conditions and economic outlook. Understanding the fund's asset allocation strategy will help you gauge its responsiveness to market changes and potential for returns.


 
 Fund manager expertise:
 
 The success of a multi-asset allocation fund largely depends on the expertise and experience of the fund manager. Research the fund manager's track record, investment philosophy, and decision-making process. A skilled and experienced manager can navigate market complexities, make informed asset allocation decisions, and optimize the fund's performance. Look for funds managed by professionals with a proven history of delivering consistent returns.


 
 Expense ratios and fees:
 
 Multi-asset allocation funds often come with higher expense ratios compared to single-asset funds due to their active management and diverse holdings. It's essential to consider the fund's expense ratio and any additional fees, such as management fees, administrative fees, and transaction costs. Higher fees can erode your overall returns, so weigh the costs against the potential benefits of the fund's performance.


 
 Historical performance:
 
 While past performance is not indicative of future results, analysing a fund's historical performance can provide insights into its consistency and resilience in different market conditions. Review the fund's performance over various time periods, including bull and bear markets, to assess its ability to deliver stable returns. Compare the fund's performance with relevant benchmarks and peer funds to gauge its relative strength.


 
 Liquidity and accessibility:
 
 Consider the liquidity and accessibility of the multi-asset allocation fund. Some funds may have lock-in periods or restrictions on withdrawals, which can affect your ability to access your money when needed. Additionally, check the minimum investment requirements and ensure they align with your financial capabilities. Opt for funds that offer flexibility and ease of access to your investments.

<h2>
 Conclusion
</h2>

 Investing in multi-asset allocation funds can be a strategic way to diversify your portfolio and achieve your
 financial goals
 . They are ideal for investors looking for steady returns with lower risk. By understanding the features, advantages, and tax implications, investors can make informed decisions to achieve their financial goals.


 By considering factors such as investment objectives, risk tolerance, asset allocation strategy, fund manager expertise, expense ratios, historical performance, diversification benefits, liquidity, and
 tax
 Implications allow you to make educated choices that match your investment approach. Perform comprehensive analysis, assess various possibilities, and seek advice from financial experts to confirm that multi-asset allocation funds suit your investment path.


 
 Disclaimer: Mutual fund investments come with risks, such as the possibility of losing your initial capital. It is advisable to seek advice from a financial advisor prior to making any investment choices.
 


 
 Kuvera is a free platform for directly investing in mutual funds.

Q&A: What Sets Multi-Asset Allocation Funds Apart From Equity Funds in India?

Unknown equities, investing, investment strategies and advice, mutual fund investement strategies and advice, mutual funds

Q. My wife and I have been investing in an equity mutual fund for the past 7 years. We now intend to diversify. Many of our acquaintances have suggested that we invest in the hybrid mutual funds cat…