Will gold continue providing a strong return in 2025?

Donald Trump will become US President once again in January. What will that mean from an ­investment perspective?

I don’t really expect any radical ­change. Trump will attempt to further boost the American economy, which is already performing well, and, in turn, the stock markets too.

How will he ­do that?

Through tax cuts and by reducing red tape and government regulations to help ease the burden on companies in the US. Trump previously put together a similar set of measures during his first presidency. This benefited US equities in particular.

Should the Swiss economy be concerned?

In relation to his 'America first' strategy, yes. The tariffs he is threatening would harm Swiss companies. The situation is different with regard to Swiss stocks. Major exchange-listed corporations, like Nestlé, Novartis and Roche, could possibly even benefit because they have production facilities in the US, whereas smaller companies that manufacture in Switzerland are likely to be hit harder.

When will we see the 'Trump effect' on the stock markets?

Actually, we've already seen it. Equity prices have risen sharply since his re-election. The announced tax relief on companies and citizens will boost investment and consumption. The stock market, particularly in the US, also looks set to benefit next year.

Which sectors will Trump's policies help?

Financial service providers, such as major banks, the oil industry and the commodities sector will benefit from deregulation. The same goes for smaller companies held back by red tape. In terms of energy policy, Trump will favour grey over green energy production.

What risks does Trump's economic policy present?

Trump has threatened to impose high import tariffs of up to 60%, especially on Chinese products. If he carries through on his ­threat, retaliatory tariffs can be expected. Trade wars unsettle the markets and cause inflation. However, we’re hoping negotiations can help avert a trade war.

The last wave of inflation appears to be over and interest rates are falling across the board. Is that a good sign?

Yes, because this incentivises companies to invest. Projects that had been put on hold are implemented because financing is attractive again. This usually creates good conditions for stock markets.

Are you expecting further interest rate cuts?

Yes. We're keeping a close eye on the Federal Reserve, the US central bank, in particular. The pace of interest rate cuts is crucial: they mustn't be reduced too quickly or they could cause inflation.­ Nor should they be cut too slowly to avoid triggering a ­recession. Ultimately, the monetary policy of central banks will have a greater impact on stock markets than Trump's policies.

Nevertheless, the incoming US President has given Bitcoin a renewed boost. Is investing in cryptocurrency a wise move if you can afford to?

That depends on how far you trust Trump's promise to promote the crypto-industry in the US. During his first term in office, he was fiercely opposed to cryptocurrencies. Yet now he claims to be a big fan. Will things stay that way? We just don't know. I'd advise caution anyway.

There's also a lot of hype over artificial intelligence (AI), as highlighted by the soaring share prices of chip manufacturer Nvidia and software company Palantir. Will this trend continue?

AI companies have been valued at extremely high prices. It now remains to be seen whether business models can be established for AI applications in order to monetise the huge investment.

The conflict in ­Ukraine and the Middle East has had little effect on stock markets thus far. Will it stay that way?

Yes, provided these conflicts continue to be confined to their regions. However, short-term volatility can arise at any time. Investors shouldn't panic about this, but instead hold onto their investments.

Having risen in value by 25% in 2024, gold was one of the best-performing asset classes this year. Will this bull market continue?

We expect the price of gold to remain at a high level in 2025. When the upturn began in 2022, gold was primarily being used to hedge against crises and inflation. What's surprising is that we recently had high interest rates, which are not favourable to gold because it doesn't yield interest. It seems attitudes towards gold have changed. Today, people are increasingly using it strategically to diversify their portfolios.

The euro is moving in a completely different direction. What does the current slide in the value of the single European currency mean for Swiss investors?

Things aren't going well at the moment in the euro zone and especially Germany, both economically and politically. The poor state of our most important trading partner doesn't bode well for Switzerland. However, global diversification of investment and sticking to a defined strategy are more important than exchange rates, even in turbulent times.