Extra Market Update: More on the March slump

• US stock prices have fallen sharply
• Investors are concerned about a trade war and the unpredictability of Trump's policies. 
• The best thing to do is to remain calm and see the current market as an opportunity

Stock prices fall sharply in March

Last Monday, the American S&P 500 fell by 2.76%. The American tech index Nasdaq even dropped by 3.99%. 

Why are the prices falling? Investors are worried about the American economy. Trade conflicts with Canada, China and Mexico are increasing the chance of a recession. In addition, President Trump's unpredictable policies cause uncertainty about the future – something investors don’t like. 

The US imposing import tariffs on Canadian, Chinese and Mexican products is causing prices to rise in the US. This hits American consumer's wallets. Consumers are more cautious about their spending, which is bad for economic growth. Last month, consumer spending fell for the first time in two years. American consumer confidence also dropped significantly last month. 

In addition, the new Trump administration is cutting government spending drastically. Many civil servants are losing their jobs and with that their income, which is bad for consumer spending. The way in which the cuts are being implemented (with a figurative chainsaw by Elon Musk's DOGE department) also leads to a great deal of uncertainty, which is not beneficial for consumer confidence. 

Finally, it doesn't help that President Trump himself says he doesn't rule out a recession. This makes investors more cautious, especially since the US economy is by far the largest in the world. If US economic growth slows or the economy even shrinks, the whole world will notice. This is also why stock market prices are falling globally.

Table 1: Net returns of index funds in standard Peaks portfolios

Important to know:

These net returns reflect the performance of index funds in February 2025, all of 2025, and since Peaks launched on 22 November 2017, after deducting Peaks, fund, and transaction fees. The value of investments can fluctuate, and past performance is no guarantee of future results.

Bonds also fell in value last week

European government bonds also fell in value last week due to a significant increase in interest rates. Interest rates in Europe are rising because EU politicians want to relax budgetary rules in order to invest more in defence. In addition, Germany has announced it wants to loosen its strict internal budgetary policy in order to invest more in defence, and in the German economy. This means Germany will be borrowing much more in the future. 

This will lower the value of existing bonds in the short term because these bonds pay a lower interest rate than the current market rate. In the medium term, however, it means that bond investors will receive a higher interest rate on the money they have lent. It will hurt now, but investors will benefit in the long term.

State of the Peaks portfolios

The declines in market value have caused the value of the Peaks portfolios to fall as well. The Adventurous portfolio suffered the greatest losses (-5.5%), as this portfolio invests the most in shares (90%). The Cautious portfolio invests the least in shares and has suffered a smaller loss (-2.9%).

Table 2: Net returns of Peaks portfolios

Important to know:

These net returns reflect Peaks portfolios in March 2025, all of 2025, and since the launch of Peaks on 22 November 2017, after deducting Peaks, fund, and transaction fees. The value of investments can fluctuate, and past performance is no guarantee of future results.

The above figures assume a portfolio value of €10,000 without any deposits or withdrawals. If you made deposits or withdrawals this month, your personal return may differ. Your return will also vary if you have invested less or more than €10,000 due to the monthly fees Peaks charges.

A long-term investor sees a price drop as an opportunity

If you are a new investor, the current stock market slump may make you feel insecure. But remember that the Peaks portfolios and the companies you are investing in are currently about 3% to 5% cheaper than at the beginning of this year. If you continue to invest, you can benefit from the current lower prices in the long term (when the stock market recovers).  

For long-term investors, a stock market dip is an opportunity rather than a threat. Dips are part of the game – once in a while, stock prices drop for a short or longer period. Sometimes the drop is severe, sometimes it’s not too bad. But no matter what happened in the past, the stock markets have always recovered from dips.

So stay calm and don't let the news or your emotions get the better of you. Keep your focus on the long term!