The Trump administration wants to maintain the dollar as a reserve currency, while simultaneously weakening to gain competitiveness on international markets. It’s a classic case of squaring the circle. What began as a cyclical crisis must absolutely not be allowed to become structural. Investors are now questioning the dollar and US interest rates...

• Is the damage done?

• Three-cushion billiards

• Two strategies in opposing winds

• B-R & H Finance

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Market Review

Is the damage done?

Unlike our usual market reviews, this time we’re not going to overwhelm you with numbers. We’re going to take a step back, because one of the key roles of a wealth manager is to shield their clients from market noise.

We’re not here to fan the flames. That said, as always, the numbers are available on LinkedIn.

The events of the past few days have highlighted three key points in our view:

A disproportionate shock

First, there’s the completely disproportionate scale of the market correction: over Usd 10'000 billion in lost market cap on the S&P500 alone at the height of last week’ crisis, compared to the tariffs proposed by the US administration, estimated between Usd 600 and 800 billion (that’s 15% of the Usd 4.2 trillion of US imports). Communication was beyond terrible and the impression that nobody was at the helm.

As the midterms approach (still distant…), we hope for a bit more restraint. But let’s be realistic: markets fall fast and climb slowly. Patience and a solid dose of composure will be essential.

We also believe the aftershocks aren’t over yet. Let’s just hope China, feeling cornered, doesn’t take a “what’s the point, might as well” stance and decide the time is right to invade Taiwan.

Towards a new reference basket?

In real-world terms, US markets were probably, maybe, overvalued. But companies remain broadly healthy, and we’re on the brink of several major technological revolutions (AI, humanoids) that will deeply reshape global growth. Humans will gradually lose their central role in production, and demographics will be permanently altered: the more robots you have, the fewer humans you need.

So the overvaluation, in our view, was all relative.

Europe, on the other hand, was clearly undervalued and doesn’t deserve its current fate. A big part of this has to do with the dollar’s role as a reserve currency. A reserve currency is a currency used for trade between two countries, even though neither uses it domestically. For example: Vietnam buys soybeans from Brazil, Brazil buys palm oil from Vietnam, and both transactions are denominated in Usd.

The rest of the world should seriously consider adopting a currency basket. For instance: 25% Usd, 25% Yuan, 25% Eur, 10% Yen, 5% Stg, 5% Chf, 5% Nok. A kind of monetary Esperanto, more representative of today’s economic balance

The Chinese hold the cards

Which brings us to the third problem. Since the dollar is the reference currency, everyone holds... way too much of it. The result? Massive hoarding of US debt, which allows the US to issue endlessly and keep rates low. That’s crucial, considering the current debt-to-GDP ratio sits at 123%.

But what happens if China decides to go on strike, or worse, to sell off the trillion dollars of US debt it holds? Interest rates spike, and the US situation becomes quickly untenable. We got a taste of this scenario last Wednesday. These sparring matches are just beginning. And sadly, the rest of the world risks playing the role of collateral damage.

Hence our repeated recommendation: do not invest in sovereign debt. Corporate borrowers are priced off the sovereign yield curve, hence they suffer by ricochet.

Stock markets can decouple from the dollar, but not from dollar interest rates. As a Mar-a-Lago deal drifts further away (Trump’s third-stage rocket), the possibility of the Fed buying up US debt again, as it did during the 2008 crisis, was back on the table...

Few numbers

• 2.5 billion players: that's the number of video game players worldwide, with an annual growth rate of 10%.

• 1817: the invention of the bicycle radically expanded the romantic perimeter; before that, English couples were, on average, born less than 1 mile apart.

• 126 million dollars: this is the quarterly net loss of Sphere Entertainment, owner of the spectacular LED Sphere in Las Vegas, already caught up by financial reality after the U2 effect.

Editorial

Three-cushion billiards

A good shot in three-cushion French billiards is when you never hit exactly where you want the ball to end up. You aim left to reach the right; you bounce off to go around the obstacle. It’s the art of moving in disguise, of never saying out loud what you’re really after. In diplomacy, this strategy has often proven its worth. And it might just become old Europe’s best asset once again.

While the United States charges ahead with sanctions, tweets, and tariffs; while China plays the long game, silent but methodical, Europe could embody something else entirely: the subtle art of mediation, of detours, of lateral movement.

I’ve always had a particular admiration for the Duke of Talleyrand (Prince de Bénévent and Bishop of Autun). In our youth, with a few friends, we used to read biographies about him like others read crime novels, for the sheer pleasure of elegant cynicism, of compromises dressed up as betrayals, and of that unique ability to always land on the right side of History, even when it wobbles. Naturally, a man who said “anything excessive is insignificant” is bound to be appealing. We admired in him this ability to avoid direct conflict, to bend circumstances until the truth twists in his favor. At the Congress of Vienna in 1815, he nearly showed up as a surprise guest. France had just been defeated, humiliated, cast out. And yet, just a few weeks later, it was once again indispensable. Talleyrand didn’t straighten out France; he straightened out the table. And that already means a lot.

Mediation is just that: the art of stepping into a conflict without taking sides. Speaking to everyone without repeating anyone’s words. It is the “at the same time” in its diplomatic version, a posture that Emmanuel Macron, it must be said, has mastered brilliantly. Not out of humility, no; but precisely because he loves being everywhere at once, center stage, top of the bill, and, if needed, behind the curtain too. It takes time (he has it), memory (he has that too), and a certain tolerance for complexity. That is a rare trait these days.

But to play three-cushion billiards, you still have to know what you’re aiming for, even with a rebound. And that’s where things get tricky. Brussels oscillates between geopolitical ambition and bureaucratic caution; between wanting to play a role and fearing it might lose its comfort. There’s hesitation to step out into the open. Yet, in a world where direct confrontation saturates the airwaves, silent strategists still have a card to play. While Ursula von der Leyen doesn’t quite have the stature, Macron could very well replace her, provided she agrees to step aside.

A few days ago, I met with an old diplomat, Belgian I believe, in a discreet lounge at the Baur au Lac. Thick carpet, classic furniture, a Botero on the wall (surprising); the kind of place where people speak in low voices. While discussing the current situation, the tensions, the posturing, the shifting lines that don’t really move forward (a bit like the Russian front in Ukraine), he shared a reflection I’ve been turning over ever since: “The Americans bring the planes, the Russians bring the problems, and we bring coffee and paper. And in the end, it’s often us who write the first draft of the agreement.” Then he let a silence settle, thick, like the carpet beneath our feet, before adding, with a slightly sad look: “The Americans think silence is a void, while the Chinese see it as space.”

That day, I understood something: some victories aren’t won by striking hard, but by waiting until the others tire themselves out swinging wide.

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Investments

Two strategies in opposing winds

April 9 will go down in the options books as a special day. The VIX surged past 50% before dropping back to 28%... in just a few hours. It’s not so much the level reached that was unprecedented, but the speed of the movement; the strongest intraday variation ever recorded.

On that day, in the heart of the storm and while markets were collapsing, President Trump first tweeted that the current index levels represented a buying opportunity. Then, just a few hours later, he announced a 90-day moratorium on new tariff measures, to allow time for bilateral negotiations. The result: volatility collapsed. And, as is often the case in such episodes, few were able to take advantage of it.

Yet volatility is one of the rare market elements whose behavior can be anticipated with a minimum of structure. It rises, sometimes sharply, but it also falls, almost mechanically, once it crosses a certain threshold. From 50% onward, history is fairly clear: excess becomes unstable and always ends up correcting.

In this context, certain strategies regain their full meaning: selling puts, or setting up “worst of” products on weakly correlated underlyings, allows one to earn a generous premium.

But here’s the thing: most investors do exactly the opposite. They sell volatility when it is low and buy it when it’s expensive.

Volatility is a cyclical phenomenon. But it is also an opportunity for those who know how to observe it without fear. Days like April 9 remind us that markets sometimes reward those who dare to read them through a lens other than the headlines.

US market exposure

Pierre Montézin, strategic advisor at B-R & H Finance, has for the past six months championed the merits of an elegant three-pillar strategy for staying exposed to the US market while limiting its excesses. This approach is based on an equally weighted allocation across three instruments:

• 1/3 in ETFs replicating the S&P500

• 1/3 in equal-weight ETFs, regularly rebalanced on that same index

• 1/3 in Berkshire Hathaway shares

This structure helps reduce the influence of the “Magnificent 7” (or their successors); it ensures exposure to both growth and value stocks and enables smoother navigation through market cycles. It also introduces an element of active management through one of the world’s best capital allocators. Granted, the question of his succession remains unresolved.

Some stocks remain overrepresented (Coca-Cola, Apple…), but overall the composition strikes a subtle and robust balance. A structure that looks simple on paper, but is decidedly sophisticated in its effects.

Wealth

Is the invisible tax easier to bear?

The rivalry between direct and indirect taxation is nothing new. Since the 19th century, economists have debated the issue: on one side, advocates of direct taxes, considered fairer because they are proportional to income; on the other, liberals who support indirect taxes, seen as more discreet, more incentive-based, and more growth-friendly.

The classic capitalist approach — from Smith to Ricardo, and later Hayek and Friedman — defends the idea that direct taxes discourage effort and investment, whereas indirect taxes preserve the freedom to consume… or not. This is exactly the logic Donald Trump seeks to revive: lowering income and corporate taxes while funding public spending through tariffs or consumption taxes.

The result? A greater feeling of wealth among taxpayers, especially the upper middle class, while the tax burden gets spread more thinly across the population. But this system, seemingly more “painless”, is still regressive: it weighs more heavily on those who spend everything they earn than on those who save.

And this is precisely where the issue becomes one of wealth management.

Direct taxes target capital or income; indirect taxes, on the other hand, preserve savings — at least as long as they aren’t spent. That’s a major difference for those looking to pass on wealth, accumulate capital, or optimize their tax burden over time. A world with less direct taxation is, mechanically, more favorable to those who already have wealth, and less so to those trying to build it.

In matters of taxation, as elsewhere, it’s not enough to know what you’re paying. You also need to understand what you’re funding.

B-R & H Finance

Founded in 2004, B-R & H Finance SA is a Swiss entity specialized in wealth management. We offer a full range of personalized and independent investment services and advisory solutions. Regulated by SO-Fit and authorized by FINMA, we are also members of the ASG (Swiss Association of Independent Asset Managers) and work with leading custodian banks.

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