Where to invest in today's moments of uncertainty

Faced with current economic volatility, geopolitical tensions, and financial uncertainty, the key question for investors is:

Where can you protect and grow your capital?

This article will examine, in two chapters, the current situation of the two main investment options — the financial market and the real estate market — and in the third I will compare them, analyzing their advantages and disadvantages in times of turbulence.

What does investing mean?

Investing is the allocation of resources (money, time, effort) with the aim of obtaining a future gain or benefit. It involves giving up current use of those resources to obtain a greater return in the future. To better understand the behavior and decisions behind investing, it can be useful to learn more about investor psychology.

Key factors to consider before investing

Before making a decision, it's essential that the retail investor answer the following questions:

• Investment time horizon: short-term or long-term.
• Risk profile: how much risk are you willing to take on to obtain greater returns?
• Capital available for investment: the greater the capital to invest, the wider the range of possibilities.
• Liquidity: how long it would take to unwind your investment to get your money back.
• Current context: global uncertainty.

In this environment, exploring real estate projects with solid backing and future vision — like those offered by Larimar City — can be an attractive alternative to diversify and protect capital.

Financial Assets

Financial assets are non-physical assets whose value derives from a contractual right over an underlying asset. In simpler terms, they represent a right to receive a future flow of income or benefits.

Current markets are directly affected by the uncertainty generated by the policies of the major powers (China, the U.S., Europe), commercial tensions, and geopolitical conflicts.

I'll take two references to show the current situation: the VIX index and the S&P 500. For non-financial readers, I'll explain what those words mean.

VIX Index

The VIX (Volatility Index) is the volatility index — one of the most common barometers of market sentiment. Implied volatility typically rises when markets are turbulent or the economy is declining. Conversely, if stock prices are rising and no drastic changes seem likely, the VIX tends to fall or remain stable. In other words, there's a negative correlation between the VIX and stock performance.

S&P 500

The S&P 500 is an index that represents approximately 80% of the U.S. stock market capitalization. It's composed of the 500 largest and leading companies across various sectors, and is considered a key indicator of the overall performance of the U.S. stock market.

Key factors to consider before investing in the financial sector

With this explained, so far in 2025 the VIX index has risen by just over 72%, reaching five-year highs — surpassed only in March 2020 by COVID-19, and in November 2008 by the collapse of Lehman Brothers.

The S&P 500 fell by just over 10%, then recovered, demonstrating the high volatility of markets.

Another significant data point has been the earnings releases of companies listed on the S&P 500 this April 2025: only 59% of companies have beaten earnings-per-share (EPS) expectations, 49% have beaten on sales, and only 36% have beaten both — versus historical averages of 64%, 59%, and 45%, respectively.

It must be kept in mind that these results don't reflect the protectionist measures (tariffs), which will worsen upcoming results. With this data, the impression is that financial markets are registering high volatility, and fixed-income yields are losing appeal versus inflation.

By Luis Velázquez Moreno

Account Executive

Larimar City & Resort