Trying to explain to my adult daughter where to invest her retirement savings ... looking like foreign stocks (VXUS) are not a bad idea after all.
I don't know how many years until your daughter retires, but it only makes sense to move out of the U.S. market if you predict it will never, ever recover from, say, a bad four years...
The market is always up eventually and unless one is close to retirement, nothing to worry about.
We get a correction like this almost every year and it's nowhere close yet to the correction we had in 2022[0]
For now post Pax America is merely a fantasy that reveals a lot about the people that think it's happening now (they're showing their personal preference). The same things were said due to Trump's first term also. Instead the US got more powerful and far richer in the time since then.
Back in reality, the 1860s, 1930s and 1970s were worse for the US than anything going on now. The 1930s were drastically worse. The US as superpower has survived far worse than Trump and it'll do it again.
Is voter disfranchisement a thing? Will the US have more of it? Will the "activist judges" brought in by the MAGA party let it happen? All of the above?
It is not about MAGA, they were a tool, they are not critical anymore. You are looking at a new fascist rule, with complete state capture. It is not completely done yet, and there is still a change the coup will fail. But people are complying out of fear, the military leadership has been purged and cleansing is still going on everywhere. So the window of opportunity is closing.
Do not focus on Trump. He is a Chaos Actor and he will be disposed of when he can't deliver of is not needed anymore.
> post Pax America is merely a fantasy
> they're showing their personal preference
I was prepared to take a bath after seeing the news this past week, but I’m actually up a bit—VTSAX is down, but the others are all up.
Such a strategy might make sense if you think real estate will outperform non-real-estate stocks in the long run (which, if you believe the Boglehead school of passive index investing, you shouldn't), or if you think the real estate market is not correlated with the stock market (which isn't the case), of course.
Ben Felix has a good video about it [1].
A 50/50 split between US and international means you're overweighting international. By market cap, the US is about 60% of the world and ex-US is 40%. (Around 1990 ago it was 30% US, 70% ex-US.) If you want a "passive" approach, the solution is to buy VTWAX (Vanguard Total World Stock Index Fund Admiral Shares), or its ETF version, VT.
What I’m curious about is how this will affect smaller regional markets such as the ASX, if our investors who prefer American markets will return those dollars here or into larger Asian markets closer to the NYSE in volume.
1. GOP has been MAGA for 10 years.
2. The electorate elected him again, even after being a felon, even after 6th Jan.
What is the reason to assume it _will_ change?
I'd say it will morph, and elements will remain in the republican party but not intact.
Trump is a huge magnetising force but without him, it doesn't really have anyone else. Sure people like Vance will try to further their own ambition but none of them will succeed in taking on the mantle and keeping it as the force is today.
But everyone in a position in power and/or leadership is presumably MAGA now? Who will they promote within the party?
Nothings guaranteed anymore when the old order is being thrown out
Look to the countries Trump worships.
If the population doesn't react during this year, it might be too late in four years.
In Portugal it took us 30 years, and elections were happening.
Say it enough times and we’ll look for other more relational and reliable trading partners.
My non-US positions have done shockingly nothing the past few years.
Chinese equities were practically being given away a year ago.
At some point there was going to be rotation but believe what you want. Of course, news headlines about the market are never wrong!
The US has a gargantuan debt problem to handle, and reciprocity in tariffs seems far from an 'antic.'
We have become a source of absolute chaos and until we settle down into an understandable and, critically, stable set of behaviors three is no belief in us.
You can’t rely on past behavior as a source of trust for counter parties when you are simultaneously telling those counter parties that every agreement you enter into is worth nothing upon tomorrow.
WRT tariffs, both economists and more layman's explanations make it clear that, at the very, very least, the Trumpian view is out of touch with reality.
For example country A, having a massive trade deficit with country B, because you buy raw materials which you refine into products and sell to country C can absolutely be a good thing for country A - and it's very conceivable that imposing a tariff on the materials from B just undermines the profitable business in your country, as the margins from that industry is squeezed by the tariffs you imposed.
For an interesting walk through tariffs, subsidies and whatnot, see https://m.youtube.com/watch?v=fSXGUGFncgk&pp=ygUPcGVydW4gdHJ... (Perun on trade wars).
Can you stop lying to yourself and to our faces? How can you claim that a this is
1: temporary
2: if it is temporary this is a good thing because it will make debt repayments easier
3: (the part you may disagree with, but I’d give you the same consideration as someone telling me the sky was actually neon pink usually) national debt payments take longer to pan out than a “temporary” down market
1. It is obvious, Trump moves lead to shrink federal govt spending and with high probability could shrink national debt and lower taxes.
2. It is obvious, after market shrink could be great grow, because market economy tends to expansion, and it will be even better because lowered debt.
3. It is not so obvious, but after great wars, like in Ukraine now, appear large demographic problems, so significant grow could begin only after demography will return to health state.
So questions are:
1. Do you think, Trump administration could so much affect demography, so it could brake market down? How this could be done in US?
2. If you are not considering significant demographic problems, please explain, from where you considering market brake?