May 2025: strong recovery, potential turbulence

Stock markets recover strongly in May

In May, the Peaks portfolios achieved very high returns: from +1.5% for the Cautious portfolio to as much as 5.5% for the Adventurous portfolio. The stock markets recovered from the sharp falls in April thanks to good corporate results. Another factor was the postponement or partial abolition of US import tariffs.

Table 1: Net returns of Peaks portfolios

Important to know:

These net returns reflect Peaks portfolios in May 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.

Due to the price increases, the risk (volatility) of the Peaks portfolios decreased slightly again last month.

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.

American stock market stands out

May was a strong month for global stock markets. With an increase of 8.7%, US stocks stood out in particular, with the tech sector and cyclical sectors such as industry and consumer goods performing well. On an annualised basis, US companies' earnings growth averaged 12.4%. 77% of companies exceeded analysts' profit expectations.

But it wasn't just the United States that did well; other regions also posted impressive figures. They all benefited from the easing of trade tensions after Trump's import tariffs were partially abolished or postponed. Import tariffs are bad for global trade and the growth of the world economy, so suspending them is good news for investors.

In Europe, the European Central Bank (ECB) further lowered interest rates from 2.25% to 2.0%. The reason: European inflation continued to decline, from 2.2% on an annual basis to 1.9%. The ECB's interest rate cut also lowered the interest rate on the Peaks Interest account.

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.

Diversification important in turbulent times

Although May was a good month for the stock market, the world is currently experiencing a period of tension and conflict with Russia-Ukraine, Gaza, Israel-Iran and China's threat to Taiwan. On top of that, there is the conflict between the United States and other countries over import tariffs. You may be wondering whether this is a good time to invest. Wouldn't it be better to take a step back? 

We have said it before: historically, the best strategy is to simply carry on. It is impossible to time exactly when to get in and out of investing. Investors who (temporarily) exit by selling their investments often re-enter too late. As a result, they miss out on part of the recovery – and often some of the best days on the stock market. This means that their average return is often lower in the long term. 

So what is the sensible thing to do? Diversify your investments so that you remain resilient in turbulent times. Diversification reduces the risk of your investments, because one investment can compensate for another. If stock prices fall because active investors sell their stocks, bond prices often rise. If you invest in both, the returns on stocks and bonds can offset each other. This reduces the risk of your portfolio. The same applies if you invest in different regions and industries. In short: keep diversifying! With the Peaks portfolios, you are already doing this well.