April 2025: stock markets recover

Recovery after low point on April 8

April was a real rollercoaster ride. The month began with Trump's “Liberation Day”, when the American president announced significantly higher import tariffs. Immediately afterwards, the stock markets plummeted: we saw one of the biggest price drops in the last 30 years, with a low point on April 8. The news was filled with titles like 'Stock markets deep in the red' and 'Investors dump their shares'. 

At moments like these, investors need to stand firm. Not only is everyone saying it's the end of the world, but you can also see your portfolio losing value. It's very tempting to sell (some of) your investments.

But experienced investors know that, historically speaking, there's a very good chance that the stock market will recover sooner or later. And that staying calm is the wisest strategy.

Optimism following Trump's retreat

This proved to be the case once again. The sharp price falls put Trump under pressure to moderate his policy. Soon there was talk of a 90-day delay, giving countries time to reach a 'deal' with the US. Promptly, the well-known American S&P 500 index rose by no less than 9.5% in a single day.

If you had sold your investments, you would have missed out on this recovery. But if you continued to invest regularly, you bought more at lower prices and actually benefited from the temporary dip.

Since then, the stock market has gradually recovered, which is reflected in the Peaks portfolios. Returns were still negative for April as a whole, but since the low point on April 8, the portfolios have risen sharply in value: from +4.7% for Cautious to +14.7% for Adventurous.

Table 1: Net returns of Peaks portfolios

Important to know:

These net returns reflect Peaks portfolios in April 2025, all of 2025, since the low point on April 9, and since the launch of Peaks, 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.

The table below, which shows the risk of the Peaks portfolios, also demonstrates that April was an exceptional month. Volatility (fluctuation) was approximately twice as high as average in April.

Table 2: Risk of Peaks portfolios

Important to know:

This table shows the risk levels of the four Peaks portfolios over different time periods (last month, this year, and the average since Peaks launched). Risk, also known as volatility, reflects the variation in annualised returns and is measured using the standard deviation of daily net returns converted to an annual basis.

US economy shrinks a bit

No one knows what will happen on the markets now. However, figures indicate that Trump's import tariffs are having an effect on the global economy. For example, American consumers and companies are increasing their spending prior to the introduction of the import tariffs to make the most of the temporarily lower prices.

Even so, the American economy shrank a bit in the first quarter of 2025 compared to the previous quarter. Also, core inflation, which shows price increases without the volatile energy and food prices, is still pretty high. That's why the American Central Bank (the Fed) didn't lower interest rates in April.

Diversifying pays off: better figures for Europe 

In Europe, on the other hand, things seem to be improving. The German and French economies grew slightly in the first quarter and inflation is low. This enabled the European Central Bank (ECB) to lower interest rates by 0.25% to 2.25%. This also resulted in a 0.25% reduction in the interest rate on the Peaks Interest account, which is linked to the ECB deposit rate.

The differences between the US and Europe are also reflected in the returns of the various regions. European stocks posted positive returns in April, while US stocks were in negative territory. Many investors are switching to European government bonds, which rose by no less than 2.3% in April.

This shows why it's important to diversify your investments – not only across different regions, but also across stocks and bonds.

Table 3: Net returns of index funds in standard Peaks portfolios

Important to know:

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