Markets catch their breath, but uncertainty lingers. In May, one question looms large: stay invested, or cash out?
I’ve always had a soft spot for musical paradoxes. Here’s a good one: a band named The Clash — already on the brink of collapse in 1982 — writes a song about doubt and indecision. Should I Stay or Should I Go? Who would have guessed such a track would become timeless? And yet, it’s now a classic. Proof, perhaps, that moments of tension can sometimes give rise to something lasting.
If that song were to echo through trading floors today, it wouldn’t feel out of place. After a rollercoaster April that began in panic and ended in a rebound stretching into May, investors too are torn: stay invested, or use the calm to pull out? Especially now that we’re in May, a month infamous in financial circles for the old adage: Sell in May and go away.
In this climate of widespread indecision, last month’s outlook proved fairly accurate. We likened Trump’s strategy to an exogenous shock — like a jarring dissonance in a score — requiring an adjustment period for investors. We also noted three key forces that could help markets regain some balance: political resistance, economic fundamentals, and in the background, the possibility of monetary or fiscal support.
A rate cut in the U.S. would certainly offer markets a breath of fresh air. But for now, Fed Chair Jerome Powell is holding firm, undeterred by presidential outbursts.
Some adjustment has taken place. The rebound at the end of April was enough to revive a touch of optimism, though markets remain below their February levels. It’s time to revisit those three forces in light of recent developments. And in the spirit of this month’s soundtrack, ask the only question that really matters: Should we stay, or should we go?
Let’s start with political resistance. As expected, the White House’s bold — some might say abrasive — approach has met limits. China hit back, several countries retaliated, Elon Musk packed his bags… but tensions are slowly easing, and dialogue is resuming. At the time of writing, the world’s two biggest powers are in talks in Geneva, with early reports pointing to “encouraging” progress. Meanwhile, negotiations between Ukraine and Russia have also resumed. These are all reasons to stay in the game. But let’s not unpack our bags just yet — even if deals are struck, Trump’s disruptive style (and the volatility it brings) won’t vanish overnight.
Next, economic data. The earnings season gave us a window into the health of the global economy. So far, the results have been largely reassuring — often beating expectations. But there’s a catch: these figures reflect the previous quarter and haven’t yet absorbed the impact of the new trade barriers. Also, the latest data from the U.S. Bureau of Economic Analysis show a slight contraction in U.S. GDP in Q1 2025. It’s not alarming — unless there’s a sudden policy U-turn — and we’re seeing signs of resilience in Europe, especially in Germany, where several governments appear ready to support growth. All in all, the momentum is fragile, but not broken. That means: stay, but don’t stray too far from the exit.
Lastly, the third lever: monetary and fiscal stimulus. A rate cut in the U.S. would clearly lift the markets. But Powell remains unmoved for now, despite pressure from the White House. On the fiscal front, several governments — notably China — are working on stimulus plans, though nothing major has yet been rolled out. Still, this isn’t a reason to leave — if anything, it’s potential firepower that could be deployed if things worsen.
In short: As long as the presidential agenda remains unchanged, volatility is likely. But at this stage, there’s no justification for a hasty exit. As long as the foundations of global markets remain intact, staying invested still makes sense. And let’s not forget: if you do pull out, where will you go? Abandoning a long-term strategy in response to short-term noise can end up costing far more than a few weeks of turbulence. Especially in an environment where Swiss interest rates are flirting once again with zero.
To borrow from The Clash — but flip the line around: “If I stay there will be trouble… but if I go, there will be double.”