How to invest in a new world with a different landscape
The negative factors from the new round of trade wars are getting hotter every day. Since Trump launched a new round of trade tariffs, the world is not only facing trade tensions, but is also facing “Vibration” That could destroy the entire global economic and financial system in the near future. Investment markets of various assets have adjusted downward, indicating that the market lacks confidence in the new world in the future.
Even though Donald Trump has signaled a retreat “Tax war” This time, however, what has happened in the past has made the world realize that this is not just a trade game, but a major change in the world order (New World Order) and is entering a full-scale economic war that is beyond expectations.
“When elephants fight, the grass is crushed.” Over 100 trading partners are also hurting. The world is standing on a fragile crack. How should we investors cope with the changes in this new world?
At this moment, I see only a picture of a dusty battlefield. Both the trade war and the economic war that are happening are definitely not short-term. Because we are in the process of reorganizing the world on all kinds of battlefields. “An eye for an eye, a tooth for a tooth.” The two main conflicting superpowers "USA - China" Between two presidents "Donald Trump-Xi Jinping" They are competing to create bargaining power for the allocation of various overlapping geopolitical and geoeconomic resources, with the goal of their own countries' economic growth in order to be able to stand on a world that moves forward with stability, prosperity and sustainability.
Will this war become a trigger for World War 3? Will the trade war negotiations ever reach a conclusion? Or will new issues continue to arise? And when will it end?
Investors around the world are disheartened by the big culprits. "Trump" Unpredictable. The current situation has damaged the economy, business sectors, and investment markets around the world, including the US economy. When Trump recklessly attacked China, the US ended up in a difficult position, having to constantly change the game and retreat to negotiate with China.
The latest alert comes from "Jerome Powell" The Chairman of the Federal Reserve or “Fed” Trump's tariffs are bigger than the Fed expected and are likely to hurt U.S. economic growth and drive up prices for consumers, potentially raising both inflation and unemployment, limiting the Fed's options for changing interest rates until the economy's trajectory is clearer.
He said in a speech at the Economic Club of Chicago on April 16 that the Fed could face a difficult situation in 50 years if its two goals — controlling inflation and supporting economic growth — conflict. While inflation is expected to rise and economic growth to slow, it is not clear which goal the Fed should prioritize. If that happens, we will have to consider how far the economy is from each goal and how long the gap is expected to close.
Powell only signaled that “Import tariffs are likely to push us further away from our (inflation) target… This is likely to continue throughout this year,”
He did not express any clear position on whether "will adjust interest rates" However, going forward, the Fed is now well-placed to wait for more clarity before considering any policy adjustments. If inflation is seen to rise, the Fed may need to maintain or raise interest rates to slow demand for goods and services. But if the economy slows, the Fed may consider cutting interest rates. He stressed the importance of keeping inflation expectations stable.
He also pointed out that short-term inflation measures, both from surveys and from markets, are trending higher, but the longer-term trend remains close to the Fed's 2% target. He expects the Fed's core inflation index for March to come in at 2.6%.
“Import tariffs are likely to raise inflation at least in the short term. The impact on inflation could be more prolonged, depending on the magnitude of the impact, how long it takes to reflect on prices, and ultimately, how long-term inflation expectations are sustained.”
While Fed officials have often viewed tariffs as temporary price pressures, the broad nature of Trump's tariffs could exacerbate inflation. Economists, including Fed insiders, say tariffs could threaten both goals.
The market expects the Fed to start cutting rates again in June and could cut rates three to four times (3% each) by the end of 4, according to CME Group's FedWatch. The Fed's benchmark interest rate is currently at 0.25%-2568%, where it has been since December 4.25, after a series of rate cuts late last year.
Since Trump returned to power as US President on January 20, he has fueled the trade war by imposing a basic 10% tariff on imported goods from countries around the world, excluding China. As for China, the import tariff ceiling was raised to 145%, effective from April 5. China retaliated by imposing a 125% tariff on imported goods from the US, which also took effect immediately. This has had a severe impact on US technology companies, forcing Trump to back down and grant an exemption for imported smartphones, computers, and electronic devices. However, while the US was calling more than 70 trading partners for negotiations, China continued to retaliate against the US by suspending the delivery of aircraft and the sending of packages to the US after Trump imposed another tariff.
Latest on the tariff war situation, Trump's side announced "We will reach an agreement with China" China has announced that it is ready to negotiate, with three conditions: 3) Trump must show respect for China; 1) Trump must restrain the US Cabinet from making conflicting trade comments and provide clear guidelines before negotiating; 2) China wants to negotiate, including on the issues "Taiwan" “Sanctions” ด้วย
The World Trade Organization (WTO) said US import tariffs would shrink global trade. It had previously forecast global merchandise trade to grow by 2.7% in 2025, but now revised its forecast to a 0.2% decline.
UNCTAD reports that global economic growth in 2025 will slow to 2.3% as trade tensions and uncertainty rise, below the 2.5% threshold for a global recession.
Amidst the market lack of confidence, it not only affects the stock market, but also affects the bond market, which has been heavily sold off, causing Bond Yield to rise sharply and rapidly in the past, indicating “Insecurity” Increasingly, the direction of US policies, even though bonds are considered low-risk assets.
The US bond market is experiencing unusually volatile times, as investors tend to turn to safe havens like US Treasuries during times of economic uncertainty.
But this time it's the opposite, with the root cause being the tax policy. “They fought back and forth.” Of President Donald Trump and the current situation, it is difficult to answer that. “China-US” Who holds the upper hand and who will suffer more in this war?
The movement of the yield rate (Yield) of US government bonds in early April found that the 10-year bond jumped to 4.592%, the highest since February 2025, before adjusting down to a narrower level of 4.296% on April 17. Similarly, the 30-year bond jumped to the highest level since November 2023, although the yield dropped slightly after that. The latest on April 17 was at 4.772%, which is still high.
Japan is currently the top holder of US Treasuries, and China is the second largest foreign creditor of the US, holding about $760 billion in Treasuries.
Analysts at Alpine Macro see that “China is using US bonds as a weapon.” By selling bonds and converting the money into euros or investing in German bonds, which seems to be consistent with what has happened in recent weeks, as German bonds have not been sold off as hard as the US, and German yields have actually fallen.
Meanwhile, some analysts warn that if China sells too many bonds, it will hurt China itself, as the price of the remaining bonds will fall, causing losses in its portfolio.
Michael Pettis of Carnegie and Michael Brown of Pepperstone both agree that if China sells too much bonds, it is “shooting itself in the foot” by causing capital to flow back into the country, strengthening the yuan, which is not what Beijing wants, especially at a time when it is trying to stimulate its domestic economy and deal with the impact of US tariffs.
Brown also analyzed that the policy “Directionless and changing” It is undermining the credibility of bonds as a safe asset, and if confidence in the US government cannot be restored, another round of sell-offs could come soon.
while "Japan" Most bonds are held by private companies, such as life insurance companies, rather than the government. Despite rumors that opposition politicians have suggested using US Treasuries as a bargaining chip in trade talks, the Japanese government says that “Bonds should not be sold intentionally.”
Gary Evans of BCA Research points out that if Japanese life insurers become distrustful of US policy and decide to reduce their holdings of bonds, that is something the Japanese government cannot control.
As TD Securities said, the sell-off in US bonds could be due to European and Japanese pension funds selling long-dated US bonds in favor of European fixed income assets.
Amidst the new round of trade wars that have just begun and it is expected that it will take years for the dust to settle, while the global supply chain is being shaken along with the continuous development of technology, what will be the new world order scenario after the war? Capital or which power? Who will win?
In the long run, the big picture is how the global economy will grow and how well various business sectors will cope with changes, whether they will survive or fail, all of which have an impact on the investment world, even for world-class investors like... “Warren Buffett” Still saying that “No one can predict the situation in advance.”
But no matter what happens, it is best to be prepared. It is the only thing we can do and control. Therefore, investors must do their homework hard because no one knows or has a clear picture of what the new world order will look like. But what can be done is to analyze the situation, understand the problems, and find the answer of what should be done to be the winner in this Trade War.
“A crisis is not an end, but a structural transition.”
Although the world stock market, the American bond market are entering a new era of world change, New World Order, which affects fundamental factors in various dimensions, we do not know what will happen tonight, tomorrow, or next year.
What is happening now is not new, but has happened many times before.
But every drastic short-term policy adjustment comes from an attempt to solve a long-term structural problem, whether it's balancing trade, controlling inflation, or protecting domestic industries that have occurred throughout world history.
We look back at three major events in world history that have happened.
The first event, the Smoot Hawley Act (The Great Depression) after World War II in 2, the Dow Jones Index fell more than 2473% and took more than 79 years to recover.
The second event, the Nixon Shock (End of Bretton Woods) in 2514, caused the Dow Jones Industrial Average to decline by more than 30% over a three-year period.
And the third event, Plaza Accord (Correct Trade Imbalance) in 2528, the US dollar depreciated by more than 25.69% within 2 years.
All three events are because the US allows short-term volatility to solve long-term problems. It is setting new criteria so that it can survive in the long term. New World Order and found that the stock market after the crisis always breaks through new highs.
What investors should learn from the past is not to panic about sudden volatility, but to look at the bigger picture of what is about to change and prepare for it. “New Opportunity” That always happens after the storm.
“In every chaos, there is a pattern.” And after a crisis… markets often come back stronger than ever.
Grandpa Warren Buffett always said that “No one can predict when a crisis will strike. A green light may suddenly turn red. But whether the drop is short or long, the important thing for retail investors is to stick to the long-term plan and keep investing.”
For example, the current situation of the Trump tariff war is causing concern and selling pressure around the world, which many analysts see as a golden opportunity to invest in quality US stocks in the long term because the market correction causes fundamentally good stocks to be sold off. “Buy good stuff at cheap prices” To wait for long-term returns
Nowadays, cheap things are not only in the stock market, but also in other types of assets, especially bonds and quality debentures, which are in a volatile state. Investors around the world are doing their homework hard, both planning their investments and organizing their portfolios to be balanced.
Diversifying your investment portfolio will help you manage more effectively because risk is always with us, whether we are aware of its existence or not.
But the awareness of what is there “Risk” It is all around us, especially in the world of investing, and trying to understand it, trying to understand the interactions between the risks surrounding each asset class, will allow you to recognize whether your portfolio has more overall risk than it can handle. Importantly, it will make your portfolio more protected from what is called “risk” than you would expect.
What is the measure of how much risk we can accept? It's simple. Look at the loss rhythm to see how much loss we can accept. If the portfolio has a chance to lose more or more than the point where you can sleep comfortably as usual, that means your portfolio is too risky. It is recommended to reduce the risk by reducing high-risk assets and adding low-risk assets instead. This portfolio adjustment aims to make the portfolio risk at an acceptable level, so you can sleep comfortably. Then, the returns will be consistent in the long term.
Currently, the most commonly used investment portfolio arrangement is Core & Satellite, which divides the investment portfolio into 2 main parts:
Core It will be a safe portfolio by focusing on investing in low-risk assets that are consistent with gradual, non-flashy returns, such as bonds, quality debt instruments, gold, Value stocks, Defensive Stocks, Dividend Stocks, developed market stocks such as the United States or the S&P500 index.
Satellite Focus on investing in stocks for profit to boost growth, but the risk is high. Stock selection will select stocks with good fundamentals, future businesses, and cheap or suitable for investment, such as investing in technology stocks, megatrend themes, and increasing the weight of stock markets that we feel are coming, such as emerging markets whose economies are still growing and worth investing in, such as China, Vietnam, and India, whose business cycles and economies will return to growth in the long term. If it is stocks, we must choose good fundamentals, cheap or suitable, and still worth investing in. If it is Jitta Wealth's investment policy, it is Global ETFs that distribute investments around the world, including stocks from the United States and leading countries, as well as many quality debt instruments around the world.
The Core & Satellite portfolio weighting, most investors will give the main portfolio at 80% and the secondary portfolio at 20% respectively, is suitable for the volatile market situation where the world is highly uncertain. It will help reduce the risk a lot. At least you can sleep comfortably.
Another strategy that can be used in every crisis is DCA or cost averaging with discipline because DCA does not require guessing when to trade. Especially during a down market, it will help you not miss the opportunity to make a return when the market reverses. Or if you already have investment discipline, continue doing so.
For those still reeling from the market swings, fearing the trade war and other potential rumours, I have two of Warren Buffett’s all-time favorite mantras that are most appropriate right now.
“To be fearful when others are greedy, and to be greedy only when others are fearful.” Be fearful when others are greedy, and be greedy only when others are fearful.
“Bad news is an investor's best friend.” Bad news is an investor's best friend.
Therefore, now you still have time to do your homework, check your portfolio health, and see where you need to reduce risk so that your portfolio can survive on the New World Order for a long time. Finally, before making a decision, you should consult an expert or the company where you have an investment portfolio so that your investment path will be stable.
For those who want to start investing but haven't started yet, this crisis is your chance to start while the market is at the bottom. If the world situation returns to normal, the strong prices of various assets will adjust to their own value. A good investment plan is the starting point of your financial life path to a good and comfortable future. I wish you all good luck and success in your investments.
