The great undoing

From the 16th to 18th century, Europe was shaped by trade wars, colonization, and the relentless pursuit of power over weaker nations. Sound familiar? The latest analysis by the Financial Times has seemingly put together the likely intention of the administration: a return to a mercantilism style of governance. So what does this mean and how do you structure an investment portfolio for this new world? 

The mercantilism system is unlike anything we've seen for the last hundred years. John Maynard Keynes 100 years ago established the concept of government intervention in economic cycles, regulation, and government spending which, in time, led to Social Security and Medicare and other social systems that Americans benefit from today. These systems have been the ire of the right for many years and are now more than ever at risk in place of having a more centralized system, where the administration can dictate capital flows at the whim of a hat.

An investment portfolio should consider the new environment carefully. Trade wars could cut supply chains and inhibit global competitiveness leading to lower quality and higher prices everywhere. Investments should be overweight in domestic manufacturing with limited foreign exposure, commodities, including agriculture and energy, and TIPS “inflation-protected bonds”, to name a few.

Despite the increasing volatility, technology companies may benefit from their proximity to the administration as well as from the AI revolution, which is expected to add trillions of dollars in productivity to the global economy. Only time will tell how this plays out which is why I suggest being flexible and patient with your investments, maintaining a solid cash reserve, and exercising good financial planning skills. 

At Eureka Wealth Management, I help clients navigate economic uncertainty, adjusting portfolios to protect and grow their wealth. Whether you're investing for retirement, managing risk, or seeking tax-efficient strategies, staying ahead of these shifts is crucial.

Book a free consultation today at eurekawealthmanagement.com.

Sources: 

FT 15 Mar 2025: “Tariffs on goods may be a prelude to taris on money” by

Gillian Tett link

NYT 5 Mar 2025: “Powerful A.I. Is Coming. We’re Not Ready.” link