The second quarter of 2025 began with turbulence as President Trump announced sweeping new tariffs, rattling global markets. One statement in particular caught our attention — the claim that Switzerland imposes a 62% tariff on U.S. goods. It later emerged that this figure referred to the U.S. trade deficit with Switzerland, not an actual tariff rate. While markets breathed a sigh of relief when the implementation was postponed by 90 days, the uncertainty reminded investors of how quickly political decisions can shift the landscape. May’s episode of our podcast «Swiss Money Secrets» will take a deeper look at the Swiss perspective on these U.S. tariffs — if you’re curious to hear more, be sure to subscribe to our YouTube channel so you don’t miss it when it drops.

A Familiar Recovery Shape

When markets plunged in 2020, many debated whether we’d face a prolonged downturn or a sharp rebound. The result was a swift V-shaped recovery. Today, we’re seeing a similar pattern emerge. While U.S. indices have largely rebounded to pre-“Liberation Day” levels, they remain negative year-to-date. In contrast, European markets experienced less volatility and smaller drawdowns, thanks in part to structural differences and investor behavior.

One key reason many of our American clients choose WHVP is precisely this: European markets tend to be less volatile than U.S. markets. When paired with a declining U.S. dollar, overseas allocations can significantly cushion the impact of domestic downturns. This quarter provided a clear example of how international diversification can preserve capital during uncertain times.

 European Tailwinds: Inflation, Interest Rates, and Stimulus

Germany’s inflation rate has eased to 2.1%, giving the European Central Bank greater flexibility. With rates currently at 2.25%, further cuts remain on the table. Additionally, newly appointed Chancellor Friedrich Merz’s stimulus package has the potential to revive the German economy, which has been stuck in a recession for nearly two years. If successful, this could mark a turning point for the Eurozone’s largest economy.

The Dollar’s Decline — What’s Next?

In late 2024, the U.S. dollar strengthened significantly in anticipation of Trump’s second term. We said then that a 10% gain in one quarter could just as easily reverse. And it did. Within one week, the dollar index (DXY) dropped 2.8%, and against the Swiss franc, it fell an eye-catching 7.6%. While some of this has since been recovered, we remain cautious.

The Trump administration has historically voiced concern over a “too strong” dollar, and many global investors are growing wary of the U.S.’s unpredictable policy environment. In our view, any short-term dollar strength should be seen as an opportunity to diversify — not a reason to increase exposure.

Many American investors remain overconcentrated in U.S. assets. With elevated volatility and weaker growth prospects at home, we believe the rotation into undervalued and stable international markets — such as those in Europe — is only just beginning.

Falling Yields and the Bond Market Puzzle

When interest rates are expected to fall, bond yields typically follow. The exception? When investor confidence in a government’s fiscal responsibility erodes. We witnessed this in 2022 in the U.K. under Liz Truss, and briefly again this year when rumors swirled that President Trump might replace Fed Chair Jerome Powell. Although those concerns were eventually dismissed, they caused bond yields to spike.

Overall, we see continued downward pressure on yields, making it increasingly difficult to find attractive fixed-income opportunities. For long-term investors seeking to hold bonds to maturity, careful selection is more important than ever.

Cryptocurrencies: Back in the Spotlight

Bitcoin’s recent surge above USD 100,000 has reignited interest in cryptocurrencies. Standard Chartered even revised their previous bullish targets, apologizing that their forecast of USD 120,000 for Q2 may be too conservative.

More noteworthy was Ethereum’s performance, breaking above USD 2,000 following the successful “Pectra” network upgrade — a significant technical achievement for a decentralized system. While part of Ether’s rally was driven by short covering, the upgrade signals that the network is adapting and potentially regaining momentum after falling behind newer competitors like Solana.

That said, volatility remains high, and long-term viability will depend on continued development, adoption, and regulatory clarity.

 Gold Soars, Silver Waits

Gold continued its impressive rally in 2025, hitting a new high of USD 3,500 an ounce in April before settling into a range between USD 3,100 and USD 3,400. Silver, on the other hand, is lagging — up 14% year-to-date after a strong 2024.

This divergence has led to frustration among silver investors, but history reminds us that markets rarely move in perfect tandem. In 2021 and 2022, many dismissed gold as an outdated inflation hedge. Now, those voices are silent. The key lesson: patience and discipline remain the most reliable strategies for long-term investors.

Final Thoughts

In this environment of shifting currencies, volatile politics, and diverging economic paths, international diversification is not just a strategy — it’s a necessity. At WHVP, we remain focused on preserving your wealth through sound, independent investment decisions and strategic offshore positioning.