A ' Trump 2.0 ' scenario could lead to significant shifts in asset prices , geopolitics , and global money flows
PHOTO : SPENCER PLATT / GETTY IMAGES than the United States , " the land of the free ." This achievement is largely due to the rapid growth of China ' s domestic markets and the establishment of new stock exchanges , such as the STAR Market , which focuses on technology and innovation-driven enterprises .
According to Bloomberg data , while the Malaysian market underperformed the USA market by -80 % over the last five years , it began outperforming it in 2024 . The trend , partly driven by Malaysian employees and pension funds allocating more capital to the domestic market , could be long-lasting .
It ’ s true that in South Korea , many investors still focus primarily , if not exclusively , on US markets . But this , too , could change over time , with banks and stock brokers launching campaigns like " Korea buys Korea " to encourage local stock market investments .
Singapore and Malaysia have introduced initiatives to boost local currency stock markets . Singapore , in particular , has formed a central bank task force to enhance liquidity in its stock market . The Monetary Authority of Singapore ( MAS ) is unique among central banks , as it simultaneously functions as a central bank , finance ministry , and regulatory authority .
DE-DOLLARISATION AND TECHNOLOGY SHIFTS
De-dollarisation trends pose another threat to the dominance of US capital markets , potentially accelerating due to geopolitical tensions and the rising acceptance of alternative currencies like the Singapore dollar , Malaysia ’ s ringgit , and South Africa ’ s rand . By enabling the emergence of global financial platforms that bypass traditional capital markets , advances in blockchain and decentralized finance ( DeFi ) are also likely to diminish , in the long term , the influence of traditional market intermediaries , including those in the US .
From a broader perspective , technological shifts will inevitably create geopolitical impacts . In the first half of this year , according to GlobalData , the USA secured over half of global high-value VC investments , reflecting its strong innovation ecosystem . But as competing powers ' efforts to attain technological leadership become increasingly credible , how will the US sustain its economic and military dominance in the long term ?
The relationship between US equities and international equities is intricate and influenced by global economic conditions , geopolitical events , currency fluctuations , and market sentiment . Understanding this relationship is vital for diversifying investments , managing risk and seizing global growth opportunities . Proper asset allocation and awareness of the inherent risks in passive investment strategies like index hugging are crucial for the performance of a multi-asset portfolio .
To preserve the purchasing power of savings and retirement portfolios , it is essential to identify emerging trends and recognize that unexpected or unthinkable events can occur , regardless of our beliefs .
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