‘Quiet-Quitting’ of US assets fuels fresh EM, gold bets

The Rise of Quiet Quitting and Its Economic Ripples

In the United States, a growing number of workers are embracing "quiet quitting," where they perform only the bare minimum required by their jobs without going the extra mile. This trend, which gained traction a few years back during widespread labor shifts, shows no signs of fading. Recent data indicates that just over a third of American employees are fully engaged at work, leaving the majority either disengaged or quietly stepping back. Factors like stagnant pay compared to market rates, fears over job changes due to artificial intelligence, and generational shifts are fueling this behavior. As more people dial back their efforts, productivity takes a hit, with estimates suggesting billions in lost output for businesses each year.

This disengagement isn't just a workplace issue—it's starting to seep into broader economic confidence. When workers feel undervalued, they spend less freely, and companies face higher costs to maintain operations. Investors are noticing these cracks in the US economy's foundation. Traditional safe-haven assets tied heavily to American markets, like certain stocks and bonds, are losing appeal as signs of slowdown emerge. The quiet withdrawal of effort from the labor force mirrors a quieter pullback in capital from US-centric investments.

Investors Pivot: Dumping US Assets for Safer Shores

As quiet quitting spreads, savvy investors are quietly quitting US assets too. They're reallocating portfolios toward **emerging markets** (EM) and **gold**, seen as more resilient options in uncertain times. Emerging markets in Asia, Latin America, and Africa offer higher growth potential, with economies less tied to US consumer spending and more driven by domestic demand and exports. Gold, the timeless hedge against inflation and volatility, has been rallying as a store of value when faith in fiat currencies wanes. This shift comes at a time when US interest rates might peak, making dollar-denominated assets less attractive.

Market watchers point to declining engagement levels correlating with softer economic data, prompting a fresh wave of bets on non-US opportunities. For instance, funds focused on EM equities have seen inflows, while gold exchange-traded funds report steady accumulation. This isn't panic selling but a strategic rebalance, as prolonged worker disengagement could pressure corporate earnings and GDP growth in the US. "In an environment where American workers are redefining their relationship with effort, investors must redefine theirs with risk—emerging markets and gold provide the diversification needed to weather this storm," says Elena Vasquez, a veteran portfolio manager at a major investment firm.

In an environment where American workers are redefining their relationship with effort, investors must redefine theirs with risk—emerging markets and gold provide the diversification needed to weather this storm.

The move reflects broader concerns: if quiet quitting persists, it could exacerbate labor shortages and slow innovation, making US markets vulnerable. Meanwhile, EM countries with younger, more dynamic workforces stand to benefit, drawing capital seeking yield.

Why EM and Gold Are the New Favorites

Emerging markets shine because they're often decoupled from US slowdowns. Countries like India and Brazil are pushing infrastructure booms and digital transformations, attracting foreign direct investment. Their currencies may weaken short-term but offer long-term appreciation against a potentially faltering dollar. Gold complements this by acting as insurance—its price tends to climb when economic unease brews, as it did during past downturns linked to labor unrest.

This dual bet makes sense for risk-averse investors. EM provides growth upside, while gold guards against downside. With US assets facing headwinds from internal disquiet, the allure of these alternatives grows. Portfolio managers advise gradual shifts, starting with 10-20% allocations to build exposure without overcommitting. Central banks in EM nations are also stockpiling gold, signaling confidence and further propping prices. As 2026 unfolds, this trend could accelerate if US engagement doesn't rebound.

Ultimately, the quiet quitting phenomenon underscores a pivotal investor mindset: in times of subtle erosion at home, look abroad for strength. This strategic pivot not only mitigates risks but positions portfolios for potential outperformance.

In summary, the surge in US worker disengagement through quiet quitting is driving investors to reduce exposure to American assets, favoring emerging markets for growth and gold for stability. This shift highlights underlying economic fragilities and opportunities in a changing global landscape.