Macro Context (April 2025 - Essentials)

The global economy entered a technical recession in late 2024, triggered by a sharp escalation in US trade tariffs under Donald Trump’s protectionist agenda. Broad import duties led to:

• Supply chain disruptions

• Cost-push inflation

• Collapsing business confidence

• A synchronized slowdown in global trade

By Q1 2025, recessionary dynamics peaked. As of April 2025, markets are transitioning into a fragile recovery phase, supported by:

• Monetary easing from the Federal Reserve

• Fiscal stimulus in Europe and Asia

• Partial normalization of global trade flows

This regime favors selective risk-taking, not broad beta exposure.

Asset Allocation Priorities for 2025

Gold & Precious Metals (Core Allocation)

Rationale

• Persistent geopolitical risk

• Structural inflation uncertainty

• Central bank reserve diversification

• Falling real interest rates

Gold remains a strategic anchor in portfolios post-recession.

Allocation guide:
7–12% of a diversified portfolio

Sources: World Gold Council, IMF reserve data, Bloomberg

Defensive & Quality Equities (Selective Risk)

Favored sectors

• Healthcare

• Utilities

• Defense & cybersecurity

• Infrastructure

Why

• Pricing power

• Stable cash flows

• Lower sensitivity to trade shocks

Geographic preference

• US large caps (domestic demand bias)

• Japan (yen weakness + corporate reform)

• India & ASEAN (structural growth, less tariff exposure)

Avoid

• Export-heavy cyclicals

• Highly leveraged industrials

Sources: MSCI, BlackRock Investment Institute, OECD

Bonds: Duration Is Back

Post-recession signal

• Peak inflation behind us

• Central banks shifting from restrictive to accommodative stance

Best opportunities

• US Treasuries (intermediate duration)

• Investment Grade corporate bonds

• Select sovereign debt (core Europe)

Avoid

• High-yield credit (default risk lagging indicator)

Sources: Federal Reserve, ECB, Moody’s

Energy & Strategic Commodities (Tactical)

Focus

• Oil (geopolitical risk premium)

• Uranium (energy security)

• Copper (long-term electrification)

These assets hedge re-inflation risk during recovery.

Allocation: Tactical (5–8%)

Sources: IEA, World Bank Commodity Outlook

Cash & Liquidity (Optional Dry Powder)

Volatility remains elevated post-recession. Holding cash:

• Preserves optionality

• Enables tactical re-entry on market stress

Allocation: 5–10% depending on risk profile

What to Avoid in 2025 for the moment

Over-leveraged growth stocks
Pure globalization plays
Emerging markets highly dependent on US trade
Speculative crypto assets (liquidity-sensitive)

Model Portfolio for the moment (April 2025 - Balanced Profile)

Asset ClassAllocationEquities (Defensive + Quality) 35%

Bonds (IG + Sovereigns) Gold 30% & Precious Metals 10%

Commodities 10%

Cash 10%

Alternatives 5%

Strategic Takeaway

The post-tariff recession environment of 2025 is not a return to pre-2020 globalization. It marks a regime shift toward:

• Higher geopolitical risk

• Structural inflation volatility

• Fragmented trade blocs

Successful portfolio management in 2025 requires:

Resilience over momentum, quality over leverage, and diversification over concentration.

Key Sources

IMF · World Gold Council · Federal Reserve · ECB · World Bank · OECD · BlackRock Investment Institute · Bloomberg

GET IN TOUCH

Have a question, a partnership idea, or want to share your thoughts about finance?
At Financia, we value meaningful connections with our readers and collaborators.
Reach out and let’s start a conversation, your insights could inspire our next article.