Hello, Reader.
If we had to sum up the last several weeks into one unifying theme, I think we could all agree that “unpredictable” does the trick.
But as we’ve seen with the recent selloffs, unpredictability is one major reason why the stock market has been struggling to stay on track.
It doesn’t like uncertainty. Never has, never will… especially not when that uncertainty is self-inflicted.
The good news is that even a small dose of consistency from the White House would go a long way toward helping the stock market stabilize. The bad news is that no one can predict when, or even if, that might occur.
As investors, we can only guess what might happen next, then do our best to set a course that is as immune as possible to the rapid-fire edicts and policy revisions issuing forth from the White House.
During the months leading up to Trump’s inauguration, I made a few guesses about how stock market trends might unfold in 2025… and I wasn’t entirely wrong.
For instance, I predicted that “lowly valued… foreign stock markets [would] outperform the S&P 500 this year… the Japanese stock market, for example, could deliver a surprisingly strong performance.”
When I wrote about the opportunity coming from the Japanese stocks here at Smart Money back in January, I mentioned that the resurgence of Japan’s Nikkei 225 index over the last couple of years could be signaling a new era of superior economic growth. Already, the Japanese economy has regained a solid financial footing.
Japanese businesses are also opening their wallets and spending. Capital investment rose 8.1% last year and is trending sharply higher. Expressed as a percentage of GDP, capital investment has climbed to 26%, which is the highest level in 16 years.
Japanese stocks are beginning to reflect these positive trends. That is why, at the time, I had recommended a play on Japanese stocks to my Fry’s Investment Report subscribers.
And since issuing my forecast, that recommendation has advanced 6.5%, compared to the S&P 500’s 4.0% loss over the same time frame. I expect this outperformance to continue.
This trade offers a compelling way to diversify from U.S. stocks. Assuming the Japanese economy continues its current growth trajectory, this play could produce solid double-digit gains for several years – even if the U.S. stock market falters somewhat.
We will continue to keep an eye on ever-changing current events and White House pronouncements. But we will keep a closer eye on the factors we can control, like buying solid stocks with superior investment prospects, no matter if they be tech stocks or non-tech stocks… and no matter if they trade here in the U.S. or in a foreign market.
These are the types of companies that I have, and will continue to, focus on at Fry’s Investment Report. To learn more about becoming a member today, click here.
Now, let’s look at what we covered here at Smart Money this past week…
Smart Money Roundup
How to Escape the ‘Tyranny of the Immediate’ in Investing
The market has experienced significant declines, with major indexes falling to multi-month lows and numerous stocks entering bear market territory. While these conditions are challenging, history shows that corrections inevitably create future investment opportunities. In this issue, I caution against the “Tyranny of the Immediate” mindset that develops during bull markets and share how one Wall Street legend isn’t falling for it, either… and where he’s looking instead.
The Selloff Continues – Here’s Why and What to Do Now
In Thursday’s Smart Money, Tom Yeung discusses last week’s severe market turmoil due to selloffs triggered by President Donald Trump’s tariffs on Canada, Mexico, and China. But America’s issues go beyond tariff news. Read on as Tom explains the unsteady market and reveals why we’re still bullish on certain companies… and where you can find them.
Quantum Stocks Just Had Their Breakout Moment – This Is Only the Beginning
Last week, the company D-Wave Quantum achieved quantum supremacy by completing a complex scientific simulation in 20 minutes that would take a traditional supercomputer nearly a million years. As a result, D-Wave’s shares popped 11% on the news. As this technology is rapidly advancing from theoretical to practical applications, major tech companies like Nvidia Corp. (NVDA) are investing heavily in quantum computing. Continue reading for more on why Louis Navellier wants you to get in on a specific investment opportunity before the market fully catches on.
Why Awful Consumer Sentiment Data Makes Us Excited About Stocks
Consumer sentiment has dropped sharply, hitting its lowest level since November 2022. Despite the pessimism, economic fundamentals remain solid: positive GDP growth, steady customer spending, low unemployment, declining inflation, strong wage growth, and healthy corporate profits. This disconnect has Luke Lango suggesting sentiment may rebound soon, potentially lifting stocks.
Looking Ahead
With all the recent market volatility, everyone may be wondering, “Is the AI boom over?”
The short answer: no.
In fact, I’ve been keeping my eye on new AI technology so powerful that it could secure America’s supremacy in the 21st century… and that’s no exaggeration.
This technology comes from Elon Musk’s artificial intelligence company, xAI. It’s a supercomputer that Musk called “the most powerful AI training system in the world.” And I’ve found company that has partnered with Musk in this new project.
I’ll share more about this project in your next Smart Money. Stay tuned.
Regards,
Eric Fry
