Ukraine, Trump, and Market Moves: What 2025 Might Bring
The 2024 stock year is drawing to a close, and it’s time to turn our sights towards the year ahead. 2025 promises to be an interesting and exciting year. We will follow developments in the war in Ukraine and see how U.S. President Donald Trump’s policies unfold. As stock market enthusiasts, we are not political players; instead, we primarily focus on the opportunities the markets present to us. With the global situation in such a phase of change, I can already say that opportunities will abound.
Take Ukraine as an example. If peace were to be achieved in Ukraine, could Finnair become an attractive investment if the airline were able to resume flying over Russia’s airspace to Asia? What about the construction sector – could there be interesting opportunities in companies benefiting from the rebuilding of Ukraine? And might there be room for growth in Germany’s basic industries, such as the chemical sector, if raw material markets were to reopen? There are many opportunities, but all of this is still speculation.
At this point, no one knows whether peace will be achieved or if the global situation will escalate further. Even if peace is reached, how long will it take for global trade to normalize? Personally, I invest in companies that are already experiencing strong growth and can deliver tangible results. I know it’s not as thrilling as speculation, but it’s a more stable approach. Speculation can sometimes turn into fact – but when that happens, it’s good to be ready to implement your plan.
In general, political decisions only have short-term effects on the stock market. However, the upcoming year may be an exception, especially due to Trump’s policies. Will there be new import tariffs, changes to corporate taxes, rules for Bitcoin, or other geopolitical shifts that impact the markets? These are important developments to monitor.
On the interest rate side, at least there should be a tailwind, but that may already be priced into the markets. Recent stock market rallies are partly based on the assumption that the Trump administration will make decisions favorable to the stock market. In that case, the rallies could be more fragile and not necessarily sustainable in the long run. What if Trump and Elon Musk have a falling out? If the markets experience strong earnings growth, that would be a much more sustainable driver for the rally.
I believe that after two strong years in the stock market, the “engines” driving the markets will no longer be able to maintain the same pace. However, I remain optimistic about 2025’s outlook. With big things on the table, market volatility will be high. Our job is to take advantage of these opportunities, keep a cool head, and then just remember: BUY THE DIP!
The original Finnish column text is available in the digital version of Salonjokilaakso, on page 11.
