Global Investing: Expanding Your Horizon

Envision a portfolio that transcends borders, tapping into the vibrancy of markets across Europe, Asia, Latin America, and Africa. This journey into global equities is not just a strategy; it is a declaration of curiosity and courage. As investors, we often find ourselves at a crossroads between familiar comfort and untapped potential. In this era of interconnected economies, the call to look beyond domestic shores has never been more compelling.

In 2025, international stocks have surged ahead, propelled by low relative valuations and robust economic catalysts. European banks posted unexpected profits, while emerging markets from Mexico to South Korea delivered double-digit returns in USD terms. The narrative is clear: widening your investment horizon can reveal opportunities that might otherwise remain hidden under the shadow of a narrow domestic market. Let us explore this transformative path together.

Understanding the Rise of International Markets

Global equities outside the United States have experienced unprecedented outperformance relative to the US in 2025. Europe benefited from falling interest rates and robust corporate earnings, especially among continental banks such as UniCredit, BBVA, and Deutsche Bank. Meanwhile, Latin America regained momentum with Mexico and Brazil both enjoying gains near 30 percent after a challenging 2024.

In Asia, Japan’s corporate reforms and a weak yen boosted exporters, China climbed roughly 25 percent led by tech giants like Alibaba and Tencent, and South Korea soared by 43 percent. South African gold miners also rallied, drawing attention to the value of diversifying across asset classes and geographies. These regional success stories underscore the power of global allocation.

• Europe: Bank profitability and fiscal stimulus
• Emerging Markets: Commodity rebounds and policy support
• Asia: Tech leadership and structural reforms
• Africa: Resource-driven recoveries and mining growth

At the core of this momentum lies valuation. International equities began 2025 at lower price multiples compared to the US, setting the stage for outsized gains as economic data and corporate results exceeded expectations.

Global Economic Outlook in 2025

The global economy in 2025 presents a tapestry of contrasts. The United States is forecast to grow at around 2.0 percent, while the Eurozone lags at 0.9 percent. China’s growth is projected at 4.2 percent, below its recent historical trend, and emerging markets are set to slow to 2.3 percent in the second half of the year, down from 3.9 percent earlier.

Inflation remains persistent due to elevated fiscal spending and potential tariff adjustments, which may constrain central banks’ ability to cut rates and keep volatility elevated. Geopolitical tensions and shifting trade policies add further complexity, affecting sector performance and cross-border capital flows. Investors must therefore balance optimism with caution, navigating these currents with a steady hand.

Diversification and Asset Allocation Strategies

History teaches us that discipline and long-term perspective are central to successful investing. The UBS Global Investment Returns Yearbook underscores the value of spreading capital across asset classes, sectors, and geographies. By diversifying, investors can mitigate localized shocks and smooth returns over market cycles.

Public equities are just one piece of the puzzle. Private markets—particularly infrastructure, real estate, and private equity—offer complementary exposures that can enhance overall portfolio resilience. Infrastructure deal values rose 18 percent in 2024, driven by energy transition and digital network investments, while real estate deal volume grew 11 percent despite fundraising headwinds.

Incorporating private equity and real assets can provide access to long-term growth themes not fully captured in public markets. However, such allocations require careful due diligence and an understanding of liquidity profiles, fees, and partnership structures.

Opportunities and Risks Around the World

Emerging themes such as AI, clean energy, and digital infrastructure are reshaping investment landscapes. Companies leading the energy transition attract capital for solar projects, wind farms, and battery technologies. At the same time, AI-driven productivity gains offer a credible route to boost long-term growth as demographics shift.

Yet every opportunity carries risk. Stretched valuations in select markets, sovereign bond pressures, and the expanding footprint of nonbank financial institutions heighten the potential for volatility. Geopolitical flare-ups and trade disputes can erupt unexpectedly, underscoring the importance of active monitoring and agile decision-making.

• Sectoral Shifts: AI, renewable energy, digital infrastructure
• Policy Uncertainty: Tariffs, fiscal stimuli, regulatory changes
• Market Volatility: Currency swings and interest rate fluctuations
• Financial Stability: Nonbank institution risks and debt levels

Harnessing Structural and Technological Drivers

The march of innovation remains a cornerstone of global opportunity. Advances in AI, automation, and data analytics can usher in efficiency improvements across manufacturing, healthcare, and financial services. Investors who identify leaders in this space stand to benefit from AI and technological innovation transforming industries.

Demographic shifts, particularly in emerging markets, are increasing demand for infrastructure, transportation, and digital connectivity. Estimates suggest that by 2050, approximately $6.5 trillion annually will be required to support the clean energy transition alone. This colossal need creates an investment frontier for those seeking energy transition and demographic shifts.

Practical Steps for Investors

How can individual and institutional investors put these insights into practice? The journey begins with a clear framework that aligns goals, risk tolerance, and time horizon. Below are tactical steps to guide your global investing strategy:

• Establish a diversified core portfolio across regions and asset classes.
• Allocate a portion to private markets or thematic funds for structural themes.
• Maintain a long-term, disciplined approach through market cycles.
• Engage in active management to capture country and sector rotation.
• Rebalance periodically to ensure alignment with target allocations.

By adhering to these principles, investors can harness the full potential of the global economy while managing the inherent volatility that comes with broader market exposure.

Conclusion

Global investing is both an art and a science, blending conviction with flexibility. By stepping outside familiar territory, investors unlock potential in emerging and developed markets alike, accessing themes that drive tomorrow’s growth. The landscape may be complex, but with a disciplined approach, long-term perspective, and active management, the rewards can be profound.

As you expand your horizon, remember that each market cycle brings new lessons and opportunities. Embrace the journey with curiosity, resilience, and an unwavering commitment to your financial goals. The world’s markets await—venture forth and harvest their potential.