Skip to content
Learning that drives better investment decisions

A. Stotz All Weather Strategies – May 2025

| |

The All Weather Strategy is available in Thailand through FINNOMENA. If you’re interested in our allocation strategy, you can also join the Become a Better Investor Community. Please note that this post is not investment advice and should not be seen as recommendations. Also, remember that backtested or past performance is not a reliable indicator of future performance.

What happened in world markets in May 2025

Performance of the World stock markets

  • Tech-heavy NASDAQ saw a massive rebound
  • Japan saw strong gains
  • Hong Kong saw a big jump, China A-shares were up too
  • Europe had a strong month as well

Find the updated Performance of the World stock markets here.

World Equity up in May

  • In 2024, global stocks gained 18.0%, and YTD, stocks are up 5.5%
  • The US Court of International Trade ruled that Trump doesn’t have the authority to impose the global trade tariffs, which led stock markets higher in May

Global Bonds fell in May

  • The strategy has a core allocation to Global Bonds; the current target allocation is at 45%
  • Rising bond yields pushed down bond prices, leading to weak performance of the bond fund

Commodities rebounded in May

  • We had no allocation to Commodities

WTI oil closed May at US$62/bbl versus US$60/bbl in April

  • Oil saw modest gains as US-Iran nuclear negotiations stalled

Energy, Livestock, and Industrial metals gained in May 2025

  • Delay or avoidance of global tariffs led to a recovery in Industrial metals prices

Gold lost 0.2% in May 2025

  • We had a 10% target allocation to Gold
  • Gold closed the month at US$3,289/oz t
  • Eased trade tensions led to a slightly lower Gold price in May 2025

All currencies have weakened >10% against Gold 2025YTD

  • Typically, a stronger US$ means a lower Gold price in US$ and vice versa

US money supply is growing again

UST yields are still high

  • It will be costly to refinance debt at these levels

The US$ index (DXY) is down 9% YTD

European stocks have gained momentum

EU might have some leverage on US

Emerging Markets ex China has gained momentum, too

BoJ owns 52% of the Japanese gov’t debt

Tariff showdown

  • In April 2025, President Trump declared a national emergency due to trade deficits, using the 1977 International Emergency Economic Powers Act (IEEPA) to impose a 10% tariff, plus higher rates on countries with trade surpluses
  • Trump asserted that trade deficits are a national security threat, giving him broad IEEPA authority for tariffs
  • Opponents argue trade deficits are routine economic issues, claiming misuse of emergency powers to bypass Congress
  • The Supreme Court will likely uphold the President’s right to declare an emergency
  • The second point is that Trump believes that IEEPA grants him tariff imposition power during the emergencies he declares
  • Opponents argue tariffs are Congress’s exclusive constitutional power (Article I, Section 8), and IEEPA is for targeted sanctions, not broad trade measures
  • The Supreme Court is likely to strike down Trump’s tariffs, affirming Congress’s sole constitutional authority

Performance review: All Weather Inflation Guard

All Weather Inflation Guard gained 1.2%

Since inception, the strategy was up 9.6% and 6.9% above a 40/60 portfolio

  • The strategy has also experienced less volatility

In May 2025, the strategy was up 1.2%, which was 0.5% below the 40/60 portfolio

  • Our 5% tilt to World Info. Tech. outperformed
  • Gold and bonds were weak as risk appetite returned to the financial markets
  • The World Equity fund we use in the strategy underperformed in May

The strategy has underperformed a 40/60 portfolio by 0.5% 2025YTD

  • The strategy beat a 40/60 portfolio by 1.0% in 2024

Performance review: All Weather Strategy

All Weather Strategy gained 3.2%

Since inception, the strategy was up 52.8% and 21.2% above a 60/40 portfolio

In May 2025, the strategy was up 3.2%, which was 0.5% above the 60/40 portfolio

  • Our 25% allocations to Developed Europe outperformed strongly
  • Our 25% allocations to China equity and Global Bonds underperformed relative to World Equity

The strategy has added 1.1% value compared to a 60/40 portfolio 2025YTD

  • The strategy beat a 60/40 portfolio by 7.0% in 2024
  • The strategy has had a higher risk-adjusted return in all periods

Performance review: All Weather Alpha Focus

All Weather Alpha Focus gained 0.5%

Since inception, the strategy was up 8.3% and 9.3% above a 60/40 portfolio

And 0.8% below World Equity, but with a lot less volatility

In May 2025, the strategy was up 0.5%, which was 2.2% below the 60/40 portfolio

  • Our 3% tilt to Financials did well, while out of our bigger tilts, only Infrastructure did OK
  • Healthcare was the worst
  • Global Bonds and Gold dropped a bit in May, too
  • The World Equity fund we use underperformed

The strategy has added 4.0% value compared to a 60/40 portfolio 2025YTD

  • The strategy beat a 60/40 portfolio by 3.5% in 2024

DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

Posted in All Weather Strategy