The art of stewardship: Navigating markets in 2025
To protect profits, investors should embrace volatility and stay strategically invested, says Kelly Chia, head of investment strategy, UOB Private Bank
Jassmin Vaanee Peter-Berntzen
SEASONED investors have spent decades observing the rhythms of markets – their ebbs and flows, their moments of exuberance and despair. After two robust years of equity performance, 2025 dawns with a complex situation: the need to protect profits, China’s artificial intelligence (AI) sector making waves with DeepSeek, and the faltering stride of the US’s Magnificent Seven tech giants. Yet, beyond the headlines lies a deeper art to investing – one that marries philosophy with pragmatism. Let’s consider five principles to guide us through this year’s uncertainties.
1. Posture determines positioning
In martial arts, posture is everything – a slight shift in stance can mean the difference between victory and defeat. The same holds true in markets. After two years of stellar equity gains, our posture in 2025 must be one of guarded agility. Protecting profits is not about retreating to cash or bunkering down in fear; it is about positioning ourselves to withstand shocks while seizing opportunities. The markets have taught us this lesson repeatedly, complacency after a bull run often precedes a stumble.
Consider DeepSeek’s AI breakthrough. This Hangzhou-based start-up has upended the narrative of US tech supremacy, delivering a ChatGPT-rivaling model at a fraction of the cost and computation power. Its success has jolted global markets, sparking a tech stock sell-off in January that saw Nvidia shed nearly US$600 billion (S$799 billion) in a single day. For investors, this signals a need to recalibrate. A posture of adaptability – shifting allocations toward Chinese tech or resilient sectors – can position us to ride this wave rather than be drowned by it. As investors, our posture should not be static; it has to be dynamic to align with emerging realities.
2. Keep the main thing, the main thing
Amid the noise of market cycles, it is easy to lose sight of our core objective (the main thing): safeguarding and growing wealth over time. Two years of equity exuberance – much of it concentrated in the Magnificent Seven – have inflated expectations. Yet, their tepid performance in early 2025, rocked by DeepSeek’s disruption and earnings disappointments reminds us that even giants can falter. Nvidia’s plunge, alongside declines with most of the Magnificent Seven, underscores a vulnerability, valuations stretched thin by AI hype can be easily rattled.
Protecting profits demands focus. Diversification across geographies, sectors, and asset classes remains the main thing. China’s ascent offers a counterpoint: Its tech stocks, trading at half the valuation of their US peers, beckon as a hedge against American overreach.
3. Keep your FUR on
When it comes to investing, the old saying “keep your shirt on”, meaning to stay calm and composed, still holds true. But let us tweak it for today’s unpredictable markets: “Keep your FUR on.” Here, FUR stands for Flexible, Uncertain and Resilient, three pillars every investor needs to thrive. First, be flexible. Markets shift like the wind, what is hot today might cool down tomorrow. A rigid strategy can leave you scrambling, so adapt to new trends, diversify your portfolio, and pivot when the data demands it. Flexibility keeps you in the game. Next, prepare for uncertainty. Volatility is the only constant in investing. Economic shifts, geopolitical surprises, or sudden tech breakthroughs can upend even the best-laid plans. Instead of fearing the unknown, expect it. Build buffers using cash reserves or hedges. Finally, build resilience. Losses sting, but resilience means sticking to your long-term vision, learning from setbacks and avoiding panic-selling. It is the grit to weather storms and emerge stronger. So, when the market tests your nerves, keep your FUR on. Flexibility, preparation for uncertainty and building resilience will help you hold steady, and maybe even prosper, no matter what comes your way.
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4. Time in the market trumps timing it
The allure of timing the market is a siren song, especially after a boom. Should we sell now to lock in gains? Buy the dip in the Magnificent Seven? Capitalise on China’s momentum? The DeepSeek shock of January 2025 – when tech stocks cratered amid fears of overspending on AI infrastructure – tempted many to play the oracle.
Protecting profits in 2025 does not mean outguessing the next dip or rally. It means staying invested with discipline. The Magnificent Seven’s tepid start this year, down from their 2023-2024 highs, may signal a correction, but their long-term potential persists. Meanwhile, China’s tech rally, up over 20 per cent year to date, rewards those who did not wait for the perfect entry. A balanced approach – holding steady in quality US equities while gradually building stakes in Chinese innovators – leverages time’s compounding power over fleeting precision.
5. Many things are taught, but some things can only be caught
Education lays the groundwork for investing: diversification, risk management and valuation metrics. But the art of navigating markets like 2025 is often caught, not taught – absorbed through experience and intuition. One of these instances was the symposium chaired by President Xi Jinping on Feb 17 with many of the nations’ leading entrepreneurs. While many would see it just as “another meeting”, we caught on that “nothing happens by accident” especially with the communist party and that this is a signal for a point of inflection. In 2024, China’s source of strength in a weak economy was its exports, but this is now being threatened by Trade War 2.0. The locals have caught on to this and the buying of Hong Kong stocks have been driven by money flowing from the mainland. In China, low valuations did not really matter in the last three years as the internal values had changed from “growth at all costs” to “sustainable growth”, “abundant prosperity” to “common prosperity” and “real estate never fails” to “the country’s largest developer failing”. As usual, markets are volatile in China but investors should catch a whiff that things are changing.
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This article was written by Kelly Chia, head of investment strategy at UOB Private Bank. Visit this website for more investment insights.
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The material contained in this publication is intended for information only and does not constitute investment recommendation or advice as it does not take into account personal investment objectives, specific investment goals or financial situation. UOB does not accept any responsibility for any loss or damage caused by any use of or reliance on the opinions or views expressed in this publication which may be subject to change due to dynamic market conditions.
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