Markets have powered to all-time highs, with the MSCI All-Country World Index climbing 5.6% year-to-date and breaking its February peak.
But as headlines trumpet a booming stock market, Nigel Green, CEO of independent financial advisory giant and fintech deVere Group, is urging investors not to confuse strength with invincibility.
“This is a market on the move and investors should be fully invested,” said Green. “This is a great time for investors, but at the same time, this is not the time for blind optimism.
“Complacency is risk. Being judicious is everything.”
The rally has defied a backdrop of global turmoil. A drawn-out tariff tug-of-war, persistent geopolitical tension in Eastern Europe, and deepening unease over the US’s unsustainable fiscal path, all threaten to cast a shadow. Yet markets are surging.
What’s driving this counterintuitive strength?
“A cooler tone on tariffs from President Trump has helped calm nerves, alongside resilient US labour data and a strong Q1 earnings season on both sides of the Atlantic,” explained the deVere CEO.
“Also, the AI-driven tech boom shows no sign of slowing. Nvidia’s blowout results and a renewed flood of capital into the so-called Magnificent Seven have supercharged gains, with that index soaring 30% since its April low.”
But the most powerful story this year may be the global diversification theme. Investors who looked beyond the US have seen the strongest returns.
“European equities are up 11% including dividends, emerging markets have delivered 9%, and Asian stocks are ahead by 8.6%. The S&P 500, despite the buzz, is only up 2.1%.”
Green added that the rally has global legs. “We’re seeing strong participation from regions that were overlooked last year. This signals breadth, not just hype.”
However, he cautions that the market’s current optimism is pricing in a delicate balance: disinflation without recession, policy support without overheating, and geopolitical risk without direct confrontation.
“These aren’t stable variables. Any of them could flip. If you’re invested, stay invested, but sharpen your focus.”
“The winners from here won’t be the ones chasing headlines, they’ll be the ones reading between them.”
Interpreting Trump’s rhetoric
A surprising shift has been how investors are interpreting Trump’s trade rhetoric.
Markets appear to be betting that threats of aggressive tariffs will be dialled back before they materialise. This so-called “TACO trade” – the belief that “Trump Always Chickens Out” – has underpinned sentiment since April.
“It’s a dangerous game to assume policy risk will always be talked down,” according to Nigel Green.
“Markets have learned to look past the noise, but that doesn’t mean the danger isn’t real. Investors need to hedge political risk, not ignore it.”
With the US jobs report due Friday, expectations are building for more signs of labour market strength. A solid print could reinforce hopes of a soft landing, boosting risk assets further.
“If the data keeps aligning, we could see a melt-up into summer,” he added.
“But if inflation surprises, or policy shifts unexpectedly, the unwind could be sharp. This is not the moment to be passive.”
The backdrop is a world grappling with multi-front pressure: deteriorating fiscal discipline in the US, central banks treading a tightrope, and lingering volatility in global supply chains. Against that backdrop, the record highs are both a testament to resilience, and a reminder to stay alert.
“The fact that we’re breaking records now should be a cue to review, not relax,” Green added. “Reassess your exposure. Lock in gains where appropriate. Rotate into quality, and crucially, don’t let FOMO [Fear Of Missing Out] dictate your next move.”
“Now is the time to be fully invested, but never blindly.”
