2025 investment guide: 'Say no to US tech stocks, allocate more to gold'

Ashika Global Family Office Services has cautioned Indian investors over the US Stock Market for 2025.

In light of global uncertainties, investors should should increase allocations to gold, viewing them as a hedge against currency risks and inflationary pressures, said Ashika Global Family Office Services, a boutique firm offering personalized investment solutions to Global Family Offices high net-worth individuals.

 

Additionally, Ashika Global remains optimistic about Indian equities, with a preference for large-cap stocks and select high-growth mid-cap opportunities. The firm also urges caution in US technology stocks, emphasizing that valuations in the sector remain stretched and may face corrections in the coming months.

 

India: The Most Undervalued Economy in the World?

 

Ashika Global Family Office Services sees India as one of the strongest yet most undervalued economies globally. The country’s stock market capitalization has reached $5.6 trillion, making it the fourth largest equity market in the world. The economy continues to grow at a 7% GDP growth rate for FY 2024-25, supported by 6,000+ listed businesses and 9 million SMEs. In 2024 alone, Indian companies successfully raised $40 billion from capital markets, reflecting strong investor confidence.

 

"India also remains a major global recipient of foreign remittances, with $124 billion in inward remittances recorded in 2024, further reinforcing its economic strength. However, despite these robust fundamentals, global rating agencies have yet to fully recognize India's potential, continuing to assign the country a BBB- credit rating—a stance that Ashika Global Family Office considers outdated and misaligned with India's economic reality," said Amit Jain, Co-Founder of the firm. 

 

Gold’s Rise as the New Global Safe Haven

 

Since 2020, gold and real estate prices have surged between 80% and 150%, validating the firm’s long-term outlook. The report highlights a significant shift in global central bank reserves, with many nations moving away from US Treasuries and increasing their gold holdings to a 30-year high. This growing distrust in fiat currency systems is fueling discussions about a new monetary order, where gold-backed currencies could play a crucial role in global trade and economic stability.

 

US Economy Faces Rising Debt and Market Risks

 

The United States is facing an increasingly precarious financial situation. Federal debt has now exceeded $36 trillion, growing by $4 trillion in just over a year. Alarmingly, projections indicate that 28% of all US government revenue in 2025 will go toward interest payments, a trajectory that raises serious concerns about long-term fiscal sustainability. Stock market valuations have also reached extreme levels. The Nasdaq-100 is trading at a P/E ratio of 34, i.e. an Earning Yield of ~ 2.9%, an indication that investors are treating it as a safer bet than US government bonds—a fundamentally illogical market trend. Furthermore, nearly 45% of companies in the Russell 2000 index remain unprofitable, exposing the fragility of the broader US equity market. At the same time, foreign ownership of US Treasuries has dropped to a two-decade low, reflecting global investor skepticism about the stability of the US economy.

 

The Global Shift Away from the US Dollar

 

"A profound shift in global financial power is underway, as many economies move away from reliance on the US dollar. Since 2019, China has reduced its US Treasury holdings by 40%, signaling its intent to diversify its reserves. This move is part of a broader trend toward "de-dollarization", where countries seek alternative means of conducting international trade, noted the report.

 

The rise of the Petro-Yuan—a potential competitor to the Petro-Dollar—could further accelerate this transition. With China now purchasing 30% of Saudi Arabia’s oil exports, compared to just 5% by the US, the possibility of a new oil trade settlement mechanism backed by gold is becoming increasingly realistic. Adding to these concerns, the US’s controversial decision to freeze $300 billion in Russian reserves following the Ukraine conflict has triggered alarm worldwide, prompting many nations to rethink their exposure to dollar-based assets.