Outperforming the 2025 Stock Market Crash

With relief, the damage from Liberation Day's consequent stock market dip seems to be largely over. March and April represented testing times for the S&P500, casually sliding through all of March, followed by unnerving volatility in April. Tech companies saw some of the greatest volatility; the Invesco QQQ Trust tracking the NASDAQ has reversed a lot of its losses but has still not fully recovered over 2 months. We are still at an ideal buying point.

Many companies and indices from across the world bore the consequences of the emerging trade war, however, the US was undoubtedly the least safe place to be exposed to. Perceived as an act of economic backfire, Donald Trump's tariffs saw outflows of funds out of American stocks into safer havens. Europe and the UK, for example, have become more attractive Western economies to invest in as a direct result - particularly the UK.

My diversification, which took advantage of deeply undervalued UK equities in key sectors like defence and strategic industries - early on - has paid off to solidly insulate against and mitigate losses during this time of panic. For a DIY portfolio, I'm proud of the results I've seen at key points. Between the start of March and the bottom, the S&P500 fell 14.82% while my portfolio only fell 7.8%. This meant that while my gains after this point may not have been as exciting as the S&P500's, I still took advantage of the buying opportunity to marginally build out my position in the discount-US economy and have ended up 1.8% ahead of the US benchmark, 1.59% ahead of the UK benchmark, and 3.34% ahead of the European benchmark.

It's small numbers, but ones that made for an easier time. To have essentially stood still and marginally outperformed over this period is a testament to the benefits of diversification. I can see a portfolio of mine in an alternative world down much lower. As mentioned, tech companies are still broadly trading at a discount. While I love the L&G Cyber Security ETF, that too is down over 6%; and from the so-called Magnificent Seven, Alphabet is unfairly down nearly 10% still.

Those casualties from the panic inspire me in the hunt now for companies unduly and disproportionately beaten down by market noise. As well as consistently building out my ETF positions, I also hope to scoop up some individual companies at excellent value. I continue to believe that slow, consistent, and steady, will win the race.