Who Will When During a Recovery?
Igor Manukhov - Apr 17, 2025
US might not be out.
US stocks have been lagging the rest of the world this year. That includes Canada as well. Is this the end of US stock market dominance? Maybe, but it is too early to tell. As the market search for a bottom, I looked at relative performance of all four major regions during the recent downturn from April 2 to April 4, and the short rebound from April 7 to April 9.
A recovery is coming—sooner or later— and it is important to position your portfolio correctly for a faster rebound. While the US was a laggard during a downturn, it also rebounded faster based on the data below. Note that gold underperformed during a recovery as well. So, while it is tempting to rotate out of US stocks and move funds into other jurisdictions or asset classes that have performed better recently, we need to start looking at where the puck is going, not where it's been. Based on relative results below, I would not rush to sell US stocks just yet. On the other hand, However, if US equities continue to underperform during the recovery phase, it may then be worth reconsidering.
Remember that all of this is temporary. This selloff will pass. Do not treat this temporary selloff as something permanent. Instead review your portfolio and try to position yourself for a faster recovery.
|
| Drop (Apr 2 to Apr 4th) | Recovery (Apr 7 to Apr 9th) |
| US Stocks | -10.49% | 8.77% |
| International Stocks | -8.82% | 6.81% |
| Gold | -2.93% | 4.26% |
| Emerging Market Stocks | -6.96% | 3.91% |
| Canadian Stocks | -8.33% | 3.84% |