U.S. Soft Landing Makes 2025 the Most Challenging Year for Investors

U.S. Soft Landing Makes 2025 the Most Challenging Year for Investors

The rollercoaster volatility of risk assets in 2025 has made it one of the most difficult years for investors since 2023–2024. While investing has become more complex, the market has simultaneously opened up extraordinary opportunities for speculative traders. In my view, 2025 may be the hardest year for investing, but it's potentially the best year for speculation. The key question for the year is: how can we transform speculative profits into long-term investments？ The answer may determine the extent of ones wealth growth over the next five years.

Macro View: Dollar Undervalued, Tech Stocks Under Pressure

From a macroeconomic perspective, the U.S. dollar appears oversold from a historical standpoint, while growth-oriented tech stocks have consistently received downgraded ratings in the Fund Manager Survey (FMS). This makes it a painful time for long-term investors. However, those applying second-level thinking should begin preparing for a shift from underweight to overweight allocations.

The Fund Manager Survey (FMS), conducted globally among institutional investors, reflects the current positioning of professional fund managers. The June FMS (conducted between June 6–12) surveyed 222 managers overseeing a combined $587 billion in AUM. The results provide insights into where the so-called “smart money” is moving.

1. The Dollar: Severely Undervalued

According to the June FMS, fund managers aggressively rotated into emerging market equities, equities in general, energy, banks, telecom, and industrials. Simultaneously, they reduced exposure to the euro, utilities, cash, consumer staples, and bonds — all defensive assets. This shift reveals a clear tilt toward risk assets and aligns with the survey's finding that cash levels fell to a bullish 4.2%.

The consensus underweight position on the U.S. dollar reached its highest level in 20 years, indicating that much of the bearish sentiment may already be priced into the dollar index.

(Chart 1: Changes in June FMS Fund Manager Positioning; Source: BofA)

From a Z-score historical positioning standpoint, the U.S. dollar is now underweight by -2.5 standard deviations, U.S. equities by -1.7, while tech remains steady at around -1.3.

As fund managers continue to offload dollar assets, this opens up potential for a strong reversal. Importantly, the current dollar weakness isnt due to structural de-dollarization but rather expectations of a soft landing and a Trump-led weak-dollar policy.

Once expectations are fully priced in, value begins to emerge. Notably, FMS data shows crowding into the “Magnificent Seven” tech names has dropped significantly to just 23%.

(Chart 2: Decline in Crowded Tech Trades; Source: BofA)

We also observe that gold has become less crowded, suggesting the speculative gold rush is fading. Large speculative traders have been scaling back their long positions, now at their lowest level since May last year.

(Chart 3: Tech Stock Crowding at a 12-Month Low; Source: BofA)

(Chart 4: Gold Long Positions by Large Speculators at Yearly Lows; Source: Tradingster)

Gold Technical Analysis

Gold extended its downside momentum during the Asian session. We advise short-term swing traders not to rush to take profits. Avoid over-monitoring the charts — emotional decision-making can lead to missed trends. For OTC traders, look for sharp short-term rallies as opportunities to enter short positions. Watch for resistance around the $3,365 level; failure to break this level may offer a good shorting entry.

• Support: $3,312 / $3,248

• Resistance: $3,365

• Stop-loss recommendation: $20

Risk Disclaimer:

The above views, analysis, research, prices, or other information are for general market commentary purposes only and do not represent the official stance of this platform. All visitors must take full responsibility for their own trading decisions. Please proceed with caution.