(Bloomberg) -- Global investors are facing a “fundamentally different epoch” in the financial markets that requires a different playbook with a more selective approach, according to BlackRock Investment Institute.

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There is a “need to move away from a simple, even naive risk-on/risk-off approach to being much more granular, much more targeted,” the institute’s chief Middle East and APAC investment strategist Ben Powell said on Bloomberg Television Tuesday.

Investors should reconsider strategies that used to work when “inflation was low and central bankers could kind of bail us out at the first sign of trouble. That’s clearly not the case anymore. Central bankers are constrained by the inflation side of their mandates,” he said.

President Donald Trump’s policies have been fundamentally altering the global investment climate. His tariff announcements rattle markets and trigger unloading of US dollar assets. His criticism of the Federal Reserve brings into question its independence. And the multi-year era of US exceptionalism is thought by many to be at an end.

“The US now has something of a risk premium that’s very different to where we were just a few years ago and it’s going to take markets a period of time to work through that,” said BlackRock’s Powell. While gold and some smaller markets are seeing inflows, there is no alternative to the dollar for now, he added.

He sees Japan as worthy of a market overweight due to its domestic economic renaissance and improvement in corporate governance. While markets could get “whipsawed around” by updates from Trump, BlackRock prefers sticking with the “mega forces” of energy transition, demographic divergence and AI for the longer-term part of the playbook.

“I feel much more confident about those than I do about what we’re going to see on Truth Social or Twitter in the next 24, 48 hours,” Powell said.

--With assistance from David Ingles and Avril Hong.

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