Amundi: A new world order, a new investment approach?
The recent crisis is not yet over, but looking beyond the short-term reactions, this period has revealed several trends that long-term investors cannot afford to ignore.
First lesson: certain assets reputed to be safe havens have not performed their usual role. At the height of the crisis, government bonds underperformed, whilst the dollar rose only slightly before returning to its starting point. And gold did not fulfil its traditional role. What held up were high-quality credit and the shares of certain multinationals.
This reversal is not insignificant and confirms two structural concerns. Firstly, the trajectory of public finances continues to deteriorate, and investors are realising that governments’ ability to absorb shocks without further damaging their creditworthiness is diminishing.
Secondly, currency debasement: ever more US dollars are being created whilst the number of dollar buyers remains stagnant. With a deficit on an upward trend, and a clear desire on the part of the US administration to keep long-term rates at a manageable level – around 4 to 4.2% on the 10-year bond – the adjustment variable is the dollar, which is therefore likely to continue to weaken.
Relatively speaking, and contrary to popular belief, Europe could fare better. Not that it is a model of orthodoxy, but the Eurozone has a lower average debt level than the United States and, above all, a stronger commitment to tackling its deficits. Added to this is a concrete agenda which, taken as a whole, points to a significant leap forward: industrial sovereignty, ‘Made in Europe’, a Savings and Investment Union, and a revised competition policy. Admittedly, we will have to wait to judge the actual progress, but the shift in philosophy, evident in speeches and in discussions with the European Commission, is real.
Second lesson: the great comeback of real assets. Faced with debt securities issued by governments without limit, shares retain a structural advantage: the number of shares in circulation changes little. They are once again the tangible asset par excellence. Gold follows the same logic, and we must stop classifying it as a commodity: it is an alternative currency, traded as such, and the case for holding it stems in particular from the ongoing currency devaluation.
Third lesson: diversification is a necessity, not merely a convenience. One need only look at the top 20 US market capitalisations to see that, with the exception of Microsoft, this list inevitably changes every decade. Blindly betting on yesterday’s or today’s winners (including the ‘Magnificent 7’) ignores the speed at which certain technologies, particularly AI, can reshuffle the deck. Some infrastructure being built today could be obsolete tomorrow; cybersecurity, combined with the rise of quantum computing, poses a risk that is difficult to account for; the revolution in AI applications in the physical world is yet to come and will reshuffle some of the deck.
This is not a time for panic or euphoria. It calls for clear-eyed optimism: realigning asset allocation with a world whose logic has changed. Diversify, therefore. By geographical region, by sector, by company size, by currency. Based on long-term convictions: the electrification of the world, for example, will create more value across its value chain than the oil industry, even setting aside any ESG considerations. Finally, try to distinguish today’s winners from tomorrow’s. The United States remains a key player, but it is merely a superficial winner in the current crisis. The winners of 2030 will certainly not be those we are hailing in 2026 and could just as easily emerge in Europe, China or India.