For the past decade or so, it was easy for the average investor to pursue a winning strategy: Load up on low-cost ETFs that tracked the S&P 500 or another big basket of U.S. stocks, then sit back and watch the returns pile up. This strategy became even more appealing as the U.S. tech sector roared and the stock prices of “the Magnificent Seven” climbed to nosebleed heights. This approach, or variations on it, came to be known as Buy America, and it worked splendidly. Until it didn’t.
“If you’d come to me 10 years ago, I would have said, ‘Just buy an index fund and don’t worry about it,’” says Stephanie Guild, chief investment officer of Robinhood Markets. Now she suggests investors consider a more active approach to their portfolios—and give them a lot more geographic variety.
Many investors came to a similar conclusion in April after President Trump announced his “Liberation Day” tariffs, which signaled that his administration would pursue his goal of expanding the manufacturing sector, even if it incurred near-term damage to a U.S. economy that had been the envy of the world since the Great Financial Crisis. The market response was immediate. The punishing tariff measures not only sent stocks tumbling but also triggered a decline in the value of the dollar and U.S. Treasury bonds. Meanwhile, a flood of capital began to head overseas, leading some to invoke a new investment mantra: Sell America.
That advice is likely overstated, especially as some markets have recovered from the shock of the initial April tariffs. But the recent “Sell America” cries can also be seen as an exclamation point on a broader trend. According to many investment experts, it’s been apparent for some time that the lopsided weighting of tech stocks in many portfolios was not sustainable. And many casual investors may be unaware they’ve built up an oversize helping of Big Tech. Most index funds are asset-weighted, which means that the bigger the Magnificent Seven grew in market valuation, the more space in a set-it and-forget-it portfolio they came to occupy.
“The Magnificent Seven are truly magnificent, but they’ve become outsize and very expensive,” says Erik Knutzen, a co–chief investment officer at Neuberger Berman. As for recent asset flight away from U.S. stocks: “We don’t think this is some kind of dire perspective on the U.S.—more of a normal, rational rebalancing.”
For retail stock owners, the sudden shift is a reminder of one of the bedrock principles of investing: diversification. Research shows that more diverse portfolios perform better over the long run because a decline in one category of assets will typically be mitigated or offset by the performance of other assets. “This year has been a powerful reminder that you don’t want to let yourself get too concentrated in any one industry or asset class, no matter how bright it might shine at the moment,” says Katie Klingensmith, chief investment strategist at Edelman Financial Engines.
The entire global economy, to be sure, is still absorbing the shock from Trump’s tariff policies, which means that the current period of volatility is far from over and investors could feel more pain. But the pain could also be easily reversed, and diversification gives investors a chance to benefit from good news, wherever it surfaces.
Investing in a new landscape
So if a passive strategy centered on U.S. assets is no longer optimal, what should investors
do instead?
First off, investing pros make clear that shifting away from U.S. assets does not mean turning away from them altogether. The U.S. economy is still stronger than many others, and its equities are still a good bet, including the “other 493” (the S&P outside of the Magnificent Seven).
The case for bonds, though, may be weaker. Robinhood’s Guild says the conventional wisdom that calls for steadily increasing the proportion of bonds in one’s portfolio as one gets older has become outdated. She points out that bond volatility has increased and it’s no longer a given that bonds’ returns will display a negative correlation to stocks.
This also means that those looking for income may get a better payoff from high-dividend stocks—a category that does not include Big Tech companies, which pay little or nothing in the way of dividends. Microsoft is the best of the bunch with a dividend of around 0.75%. Tesla and Amazon offer no dividend at all. Compare those with other Fortune 500 names Pfizer and Ford, which paid out annual dividend yields over 6%.
Meanwhile, a series of developments are underway abroad—some of them hastened by economic and geopolitical disruptions unleashed by Trump—that are lifting some investors’ outlook for stocks in Europe and Asia. Knutzen pointed to Germany, in particular, whose government has shifted away from a rigid fiscal policy to pursue broader spending on defense. Knutzen also says his firm is encouraged by pro-growth policies adopted by governments in France and Italy that are invigorating the private sector.
At the Milken Institute Global Conference in May, investing titans Jonathan Gray of Blackstone and Marc Rowan of Apollo both described assets in Germany and the rest of the continent as a bargain, and expressed optimism that an era of hyper-regulation could be receding. The pair also spoke favorably of the investment climate in Japan and India. Knutzen of Neuberger Berman says his firm is likewise keen on Japan, where, he notes, new governance policies have resulted in systemic improvements to how companies are managed. He adds that he is also spending considerable time speaking with more affluent clients about alternative investments like real estate and the booming private credit market.
For those looking to build or rebalance a portfolio, Guild proposes different ideas based on age, investment goals, and risk tolerance. For most people around age 35, she suggests a mix of about 75% U.S. stocks balanced with a helping of European equities packaged in large-cap ETFs. To round it out, she’d consider adding Asian tech stocks and commodities such as gold or Bitcoin. The calculus for those on the cusp of retirement is different, since those investors will typically want lower risk and ready access to cash. For them, Guild recommends a more conventional portfolio of around 60% stocks and 40% bonds, though she adds the latter portions should consist primarily of short-duration bonds given the current volatility of the markets.
For self-directed investors, these calls for a more diverse and complicated portfolio may pose a challenge since it will likely mean wading into unfamiliar asset categories. Hiring an active manager offers a solution to this. As always, one should feel confident that doing so will deliver additional gains that exceed the fees they charge. The good news for considering an active approach is that many advisors’ fees are dropping as a growing number of financial institutions push into wealth management services, creating more competition. (Of course, those fees will never approach those of leading ETFs, which can be as low as five basis points.) Another benefit of working with advisors: They can talk you out of yanking all your money out of the markets during a rough week.
More broadly, investors should treat the market events of 2025 in the context of a return to basics. On fundamental principle of investing that came to be overlooked during the go-go days of Buy America is that diversification will strengthen any portfolio and help it withstand shocks ranging from tariffs and pandemics to the popping of bubbles. “We are working with clients of all types on making sure they don’t have too much concentration,” says Knutzen.
3 stock strategies beyond the Magnificent 7
Until early this year, investors could make out handsomely by focusing on the few big U.S. tech stocks known by the movie-inspired moniker “the Magnificent Seven.” Inevitably, though, that playbook grew outdated as those stocks became expensive and new opportunities emerged. For those looking to balance their portfolio, here are three strategic suggestions:
The other 493
Investors may have overlooked other gems from the S&P 500. Stephanie Guild, chief investment officer of Robinhood Markets, likes these three:
Intuitive Surgical (ISRG)
This stock is already a darling, but the company has a unique, in-demand product— surgical robots—that gives it plenty of room to grow.
Arista Networks (ANET)
In the AI era, Big Tech firms are hungry for data centers, and Arista specializes in making network equipment for those vital hubs.
Gap Inc. (GAP)
An apparel company with a rocky past and huge exposure to tariffs sounds like a stock to
avoid. A closer look, though, reveals a firm well on its way to a turnaround story, with a new CEO doing many things right.
Bonjour, Europe
Long shunned by many investors owing to slow growth and excessive regulation, Europe is displaying a new economic vitality as its major economies begin to pursue pro-growth policies. European stocks, traditionally undervalued compared with their U.S. counterparts, are more so than ever. This, combined with a weaker U.S. dollar, makes them look like a buy.
Euro Stoxx 50 ETF
Guild recommends this low-cost ETF, which packages the 50 largest companies in the eurozone, providing broad and diverse exposure to the continent’s most promising businesses.
Eastern approaches
Many Asian economies have recently made giant strides in key sectors. Here are three countries to scope for stock deals:
China
The roller coaster that is the country’s tech sector is zooming upward on the strength of achievements in AI. Chinese tech stalwarts like Alibaba and Tencent, both AI players, look particularly attractive.
Japan
The Land of the Rising Sun has instituted reforms to improve transparency and corporate governance. This new turn means investors should consider multinational exporters like consumer giant Sony and Tokyo Electron, which supplies equipment to chipmakers.
India
Growing ties with the United States and multiple bright spots across the economy make broad-based India-focused ETFs a promising bet.
All that glitters
In the age of app-based stock buying, it’s easy to forget that there is one popular asset you can store in a safe or bury in your backyard: gold. It’s also beautiful: A handsome doubloon or gleaming ingot will fetch a lot more compliments than the bits of digital dust that make up the rest of your portfolio. On the downside, unlike owners of run-of-the-mill stocks, gold owners must pay significant sums to safely transport and store their holdings, and face a very real risk of robbery from burglars or shifty visitors. Gold has other drawbacks, too, of course: Unlike stocks or bonds, it provides no income yield, and physical gold is not always the easiest thing to convert to cash.
But for all its quirks, gold has been one of the best-performing assets of the past year. Recent economic turmoil has seen it live up to its reputation as the safest of safe havens: On April 22, the price of gold crossed the $3,500-an-ounce mark for the first time ever. For those who want to hold the real thing in their hands, Costco offers one of the lowest premiums for physical gold (around 2% compared with as much as 5% at other outlets). And for those who are not craving a physical asset, there is the cheap and more practical—though decidedly less pulse-quickening—alternative of an ETF. Be aware, though, that selling gold at a profit (including in its ETF forms) will incur higher capital gains taxes than stock transactions will, since gold is classified as a collectible and taxed at a higher rate of up to 28%.
For casual investors who have caught a touch of gold fever, Fortune has listed the pros and cons of popular purchasing options below.
Coins and medallions
Typically issued by national governments. The American Gold Eagle coin and the Canadian Gold Maple Leaf are popular choices.
Pros: Beautiful to hold and admire.
Cons: More expensive than other options.
Gold bars
Typically sold in flat one-ounce rectangles imprinted with a company or government logo. You can also buy larger bars—often called ingots—that are primarily traded in wholesale markets.
Pros: As basic as it gets and cheaper than coins.
Cons: Still comes with a premium to order and ship.
Gold ETFs
Among the world’s most popular ETFs, these are shares in a trust that trades like a stock, backed by reserves of physical gold stored by a bank or financial institution.
Pros: By far the cheapest option.
Cons: Nothing shiny to behold; the gold is held by a third party.
This article originally appears in the June/July 2025 issue of Fortune with the headline “Tariffs have halted the ‘Buy America’ era. Here’s what to do next.”
