I agree with
@msf (different thread) that
”Many people find government pronouncements and actions relevant to investing.”- There’s a thread along that line offered up by
@Soupkitchen January 28 in the OT section - mostly buried now by the avalanche of anti-Trump posts & comments. Worth a second look.
Where America is Heading and your Investments.
Like everyone else I’m looking for clues. From the two financial blogs / newsletters I subscribe to, here’s what I’ve gleaned …
- On February 3 Bill Fleckenstein wrote:
”Lastly, on the subject of Trump tape bombs, while we should expect them to be a feature of his term, they may become less frequent, and we may get a better handle on what they individually mean. Even so, I think they mandate carrying a little bit more cash or being slightly less aggressive than one might ordinarily be because they can literally come out of nowhere and gaming whether Trump is serious or not will be hard to do in real time.” https://www.fleckensteincapital.com/dailyrap.aspx?rapdate=02-03-2025- James Stack (
InvestTech) actually raised his recommended “Net-Long” market exposure a few percentage points from around 55% to 58% about the time Trump took office (but didn’t connect the two). Stack has been extremely cautious for a couple years. The remainder, he advises, should be in T-Bills or money market funds.
https://www.investech.com/- And
Barron’s this week features several Trump related articles - not all complementary. One, titled
”11 Tariff-Proof Dividend Stocks”, mentions consumer staples, financials and energy as among the better plays on that theme. Another article,
”The Markets Trust Trump. How to Trade It”, focuses on options plays. A third article notes that there has been a sharp uptick in very wealthy investors moving wealth abroad, some out of fear of a weaker dollar, but in some cases from fear of retribution by the party they opposed.
It should go without saying that
other investment ideas / suggestions are appreciated. Nobody really knows at this point. But risk is inherent in most investing. If it were safe or easy the rewards would be small.
Comments
The current President represents a dangerous sea change. Alliances and foes alike are getting mixed and matched. And domestically, it's a coup going on before our very eyes. The rule of Law is dead right now.
Where to invest? We have 10 gazillion possible choices in the Market. I'm not chasing anything new. I have a couple of equity holdings which offer hefty dividends. My junk bonds continue to be steady, if not growing much. (Over 7%/month with those puppies.) Money Markets were mentioned above. I'm growing ours at a snail's pace, still rather pleased with the very safe 4.18% offered.
When the spam hits the fan, I'm already a bit heavier in bonds than in stocks. Hopefully, that will provide some insulation from the conflagration. The Crisis of 2008-09 was dreadful, but for other reasons, excessive de-regulation, mostly. It's happening again, too--- an avalanche of de-regulation. Regulations will never be perfect, because the bad guys will always find a way around them. (Oliver North, yes???) And after the '09 Crisis, CLOs were simply renamed, to avoid regulatory scrutiny. (See the ending of "The Big Short.")
@Crash - That’s probably great advice for 80-90% of investors - mostly younger and employed - who research shows are usually better off letting it ride. I’d still give that advice to a 25 year old just starting out with maybe 40 years to retirement.
But take a look at the “Buy Sell” thread. ”Set-it- and-forget-it” ? Huh? Not to pick on the thread … but ISTM most who frequent financial forums like this one do alter their investments quite a bit year-to-year. So, of course, political climate affects their decision making along with a myriad of other considerations / assessments and may be worth discussion.
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Skip right to 0:20. (LOUD start!)
Crescent Street mural, Montreal:
@Junkster - would you be concerned that this regime or Congressional dysfunction makes the US default on its debt? If so, wouldn't that pretty much crash Treasuries and make folks reconsider them as a 'safe haven' for the forseeable future?
That would be a big concern for me. Unlike prior manufactured debt ceiling 'crises' this one really has me concerned....
I think many are underestimating the economic impacts of this shrinkage among all areas of the government. At least for now all is well. Stocks hanging in there in spite of some under the surface cracks and bonds of all stripes and colors doing well YTD.
At this point in my life and getting up there in age, I am more concerned with how heavy the backcountry waterfalls are flowing for photographic purposes than my portfolio value.
Appreciate you visiting and posting in this forum.
@rforno,
I have given much thought to your question. US default (even a tactical default) does not rank in the top 10 problems that would precede why our investments (other than US treasuries) might take a hit. I think Junkster gave a good lead. He always does.
(As to timing sales, that is a difficult art even for the pros like Stan Druckenmiller. Over the years, I have sought and not received good sell strategies. There was an academic paper on this and it concluded that monkeys fared better than professional investors in timing when to sell. (This is not an issue for nimble traders.))