AS global markets face mounting uncertainty in 2025, Gregory Fisher, managing director at Jefferies Group, LLC, is urging investors to approach with caution.

Speaking at Jamaica Stock Exchange’s 20th Regional Investments & Capital Markets Conference 2025, Fisher likened the current AI-driven market rally to past speculative bubbles, warning of potential risks ahead while advocating for a disciplined, defensive approach to investing.

“Markets today seem to be pricing in most assets as riskless,” Fisher said. “AI is indeed a real game-changer, but the current levels of valuation remind me of the late 1990s Internet craze where markets priced in all the upside at once. History does tend to repeat itself.”

The remarks from Fisher, representing Jefferies, one of the world’s leading, full-service, investment banking and capital markets firms, come after two record-breaking years for US equities, fuelled largely by the artificial intelligence boom. However, he warned that inflated valuations may not be sustainable, pointing to historical patterns where momentum-driven markets often correct sharply.

While not predicting the end of the AI-fuelled rally, Fisher stressed the need for a measured approach.

“I’m not suggesting we abandon equities entirely but I firmly believe the froth in valuations makes a defensive posture essential. Bonds and solid, dividend-paying stocks offer more sustainable opportunities,” he said.

He highlighted the potential opportunities in fixed-income markets as the US Federal Reserve signals rate cuts in 2025. “Locking in yields when the Fed is accommodating has historically proven to be a great trade,” Fisher noted, adding that patience and diversification remain key strategies.

Fisher also urged Jamaica to draw lessons from global trends shaping 2025. He pointed to the risks of speculative manias, warning that inflated asset values and herd mentality could lead to sharp corrections.

“This ongoing soft-landing narrative feels more like fantasy than inevitability,” he remarked. “Volatility is not normal, and we must respect what the markets are telling us.”

Turning to emerging markets, Fisher spotlighted Jamaica’s unique position as a leader in fiscal discipline. The country, once a high-yield debt issuer, now enjoys stability akin to investment-grade bonds.

“Jamaica’s bonds are behaving more like their investment-grade peers, reflecting its remarkable fiscal discipline and leadership,” he said while expressing optimism for Jamaica’s economic outlook, crediting its fiscal stewardship and growing global reputation.

“The progress Jamaica has made is extraordinary. Its bonds are now considered a safe haven — a feat that has taken years of heavy lifting,” he said,

However, Fisher acknowledged that tighter spreads could make Jamaica less attractive to international investors seeking higher yields.

He emphasised the importance of Jamaica maintaining its fiscal trajectory in an increasingly volatile global environment. “Emerging market debt saw positive returns last year but the bifurcation between credit qualities is stark. Jamaica must continue its trajectory to attract investors — despite tighter conditions,” he said.