^{Originally published in The Australian Financial Review on 6 April 2025. See the original article or download the article.}

It would be an understatement to say that the world has become a more volatile and uncertain place since Donald Trump moved back into the Oval Office in January. Given that markets don’t like uncertainty, it’s no surprise that both US and Australian shares have tumbled from their post-inauguration highs.

The celebratory mood of the market – driven by the prospect of tax cuts, deregulation and boom times ahead – has been replaced with fear and uncertainty. Escalating geopolitical tensions, trade wars, and the moving feast that is US tariff policies have cast a shadow over the outlook, raising concerns about a recession.

Among this uncertainty, one thing is becoming very clear – Trump 2.0 will be very different from Trump 1.0. As the US continues to roll out new tariff and economic policies, there is likely to be elevated volatility in the sharemarket, at least in the near term. Given the cadence of announcements from the Trump administration and their potential short-term negative impact on the US and global economy, it’s fair to assume the market will remain in a state of flux for a while longer.

The lengths to which Trump will go to achieve his goal of becoming a legacy president are beyond the scope of this article. Opinions vary widely. Some believe there is a method in his madness that may lead to short-term pain but long-term gain, while others view his actions as erratic and misguided.

Regardless of perspective, increased market volatility should present potential attractive buying opportunities for stocks in Australia. The market had been looking very expensive, particularly in sectors such as technology. The sell-off has taken some of the froth out of the market.

Buying opportunities

We believe there may be more downside to come in the short term as markets adjust to the new order, but we are actively watching for buying opportunities. Our focus remains on companies with a clear growth trajectory, strong control over their own destiny, and not overly exposed to tariffs or shifts in consumer sentiment.

One stock we think fits this description is Life360, the family location sharing app. The Life360 app is the most-used social networking app daily in the US after Facebook and WhatsApp, with a rapidly growing user base of 80 million worldwide. Its key competitive advantage lies in its leading location tracking technology, which is well ahead of its competitors, including Apple’s Find My Friends.

Life360 has grown revenue by 35 per cent per annum over the past five years as more and more users see value in the increasing functionality of the app and switch from the free version to a paid subscription, or move to higher tier plans. The company is expected to continue growing at 20 per cent or more for the foreseeable future as it continues to penetrate the US, its biggest market, as well as rolling out globally and introducing new products that can monitor the safety of pets and elderly relatives.

Its scalable technology allows the company to grow revenue at minimal extra cost, positioning it well for continued success. It is also harnessing artificial intelligence, not only for innovating the core app but also to enable targeted advertising that provides an additional revenue stream.

With a quality management team including an enthusiastic founder, we believe Life360 can continue to deliver strong earnings growth for many years to come.

Another topic on our minds that is gaining momentum in company discussions – and faster than the word “tariff” – is agentic AI. This is the next step on from generative AI and a concept we see garnering more and more attention this year.

An AI “agent” is more sophisticated than being just a generator of content or a basic chatbot – it can proactively make decisions and execute actions based on real-time data. Autonomous vehicles such as Waymo are powered by agentic AI.

Harnessing it in business processes could produce huge cost savings and productivity gains across a broad range of industries, particularly for those that utilise processes that require multiple repetitive steps and complex decision-making across numerous data sources. While it is early days, we are monitoring its evolution and impact closely.

There’s no doubt that the changes in US policies and the rapid evolution of AI are driving elevated uncertainty and volatility. The glass-half-full view is that this will result in some short-term pain for economies and sharemarkets but longer-term gains. Only time will tell.

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