Speaking of VXUS … when did Goofy start investing in this ETF?
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Tariffs are absolutely not the same as VAT. European companies get charged the exact same VAT as american companies.
That‘s one of the Trump talking points, that are just objectively false.
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I have heard this comment on news too. But I cannot understand how this is comparable
VAT is applied to every company. Tariff is applied to imports. So tariff can be seen as a trade barrier but VAT is not about restricting anyone else’s access to market , it’s just about taxing the sales in the country and that has nothing to do with trade.
Most likely US is using this as an excuse to apply Tariffs on EU but it doesn’t make them same things.
I believe we have come to a point that it seems US wants everything sold in America to be produced in America. Tariff or no tariff, it would mean every business (local or foreign ) need to review if it makes sense to invest in US assets or simply exit the market. Just because tariff is applied , it doesn’t mean local production is economically viable. It only means imports are not viable
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Agree to disagree.
In the context of import/export VAT and tariffs are exactly the same.
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Because it’s up to every jurisdiction to decide how to tax consumption. Still the market is fair, in every jurisdiction each company can compete fairly (domestic or not).
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Let’s take an example
Ford imports car into EU (let’s say 50,000 Eur) and pay 5000 Eur tariff. Next landed price is 55000 Eur
Mercedes produced a car in Germany and sell it for 55000 Eur.
Are you saying Mercedes will pay less VAT vs, Ford?
Exactly my example, but wrong numbers. If Mercedes sells in USA they keep the 50 or 55 k. If Ford sells in Spain they keep only 39-44 k because of the 21% VAT in Spain.
But now you are talking about two different countries where sale is made.
If US doesn’t have VAT , this doesn’t make US fair vs EU. It just means US doesn’t apply VAT. In other words they might want to tax people differently.
What does it have to do with Trade barriers and equal unfair practices. Every country should decide how they want to run taxation in their countries
I am not saying US cannot apply tariffs. They can. They are a net buyer in global trade, so maybe they want to leverage their position. But they should simply say that “we don’t want foreign goods” . Using disconnected arguments to apply a policy is just bizarre in my view. It doesn’t help anyone except people who don’t understand taxes and rules.
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I agree
People feel panic not because of the drops but because of narrative that comes with the drops.
The way institutions are shattered in US can make anyone feel very worried about their investments in US. Foreigners might have more options but locals typically invest mainly in US markets and have much higher exposure
One can argue that narrative is tough every time there is market drop. But we should not underestimate the power of stories. This is what makes equity investing very difficult
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Yes, of course we do. My example was import/export and I think that tariffs are very bad. VAT is bad too, as any tax that can bankrupt a company is.
I have little doubt there would be much hesitation should the leadership be convinced they have a ‚winner’ on their hands.
From the article:
This trio appears minded to reset global trade and finance, via a putative Mar-a-Lago accord, although their ambitions are on a grander scale than the 1985 Plaza accord. The latter “merely” weakened the dollar via joint currency intervention but Miran’s vision of a Mar-a-Lago accord includes a possible US debt restructuring too, which would force some holders of Treasuries to swap them for perpetual bonds. ….
To state the obvious, this would mean the US defaulting on its Treasuries, likely without calling it so. After all, those might be seen as just ‚another set of rules the greatest country on earth doesn’t need to be constrained by‘.
A third idea is imposing taxes on capital inflows in a wider sense.
… which may or may not make investment by foreigners not viable.
This might become the preferred approach if the idea of debt swaps leaves rating agencies threatening to downgrade US debt.
LOL. Are those the same rating agencies that happily sold stellar subprime debt ratings for cash in the leadup to 2008 (and calling it constitutionally protected free speech in front of courts later)?
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“Rules for thee, not for me” 
I think we need to see how it’ll play out in reality, I read that courts are cancelling/challenging a lot of what DOGE is doing. Of course DOGE is setting precedents, causing disruption, demoralising people, but I think saying US institutions are dismantled and shattered is going too far.
What’s happening right now has actually been described word for word by Steve Bannon - probably the smartest person among US conservatives - but I guess people weren’t paying attention for some reason.
I also read that the 2026 mid-term elections may be a rout for the GOP, I don’t quite understand this because I never spent any time to understand the US electoral and legislative systems. I don’t believe anything is truly over, I see how countries take a pretty careful approach balancing their national vs international interests around Trump. I’ve really mixed feelings about it because I believe this is a field Trump can navigate well by dividing and conquering, being bad cop with one country, good with another, and switch it up very fast. In any case, I feel the market will react to any bright news with exuberance, I am just waiting for the negativity to exhaust itself so we don’t get sharp movements. I believe when “business as usual” comes back, which it will eventually with anyone at the US helm, there’ll be another bull run.
Respectfully I disagree on all points. Big rant, safe to ignore!
What do you mean institutions are shattered? Part of US exceptionalism, and US equities commanding higher premiums than ex-US, is because of the belief of the institutions’ stability and transparency. If this belief is challenged, like it is now, the market reacts badly.
The narrative has become noise the last 10-15 years, this time is indeed different. There is always a narrative about anything, and as usual “hindsight is 20/20”, but nowadays there has to be a narrative 24/7 to drive clicks, and people are very susceptible to the trash that comes through their phone screens. It is not the same as 2008, 2000, or any other time in history when people got their news at specific times of the day from the radio, TV, or newspapers, and when the internet maintained some level of quality reporting. Even 2022 was different in terms of volume and (better) quality of the information that was coming through.
I don’t believe that this is what makes equity investing very difficult, I believe what makes equity investing difficult is the fact most people are fundamentally driven by emotions and urges, are extremely irrational and emotional, even if they don’t think they do, have no clue of their real resistance to volatility and risk. In my “share your story” I recall seeing people lose their shit when being shortchanged in a seaside taverna as a kid, and more recently (a FIRE person, no less) the Pfand machine breaking down in Weil Am Rhein. If people lose their shit over literal pennies then imagine when a sizeable amount of their NW is suddenly underwater.
VOO gave nearly 7x the returns of VXUS at the same timeframe, so VXUS is indeed a turd and broader diversification by picking global market cap weight ETFs works just fine in the long run. Diversification is a free lunch, but you may stay hungry for a long time (or die from starvation) until it comes! The upwards blip now does absolutely nothing to console anyone who missed VOO’s crazy compounding. People who’re so greedy and incapable of understanding that deserve no sympathy, fairness needs to go both ways otherwise it’s not fair. To be fair, as you said, the writing has been on the wall forever: “past performance etc”, “diversification vs concentration”, “timeframe for equity investment”, I know Bogle, Buffett, Lynch, may look boring and patronizing but their messages stand the test of time far better than any religious text I ever read. Bogle never advocated for 100% equity, yet “bonds are opportunity cost”, right? Even millennia ago philosophers realised the importance of “knowing thyself”, “I know that I know nothing” (both Socrates, I am Greek after all, we get this at school!), I can go further back “There is nothing new under the sun” (King Solomon, Ecclesiastes). Dunning-Kruger for a much more recent example of the same narrative. The common thread is that people who didn’t know themselves are finding out in a rough and abrupt way, which is nothing new, like the fact that crashes do happen (we’re not even in one, yet!) and performance is cyclical.
This “panic” I’m seeing (on reddit) somehow bothers me in a fundamental level hence the rant, as does anything violating my autistic tendencies. Would/should one feel much sympathy for a motorcycle rider riding without a helmet? Bad example, as it’s illegal, yet people do it (not in CH)?
SCHD is looking kind of alright innit?
Sorry for rant, time to work!
Edit: what’s the sweat smile meant to mean?
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One by one federal agencies are being dismantled in US. That’s what I meant that institutions are shattered. Now we even have a situation that Govt want to use its power to go after people who prosecuted Trump in personal cases.
I think you are saying right things but using a lot of theory. Yes it’s true human beings are emotional. But it is not a bad thing. It’s what makes them human too.
You always need people who are emotional for the un-emotional ones to profit. That’s how the market works 
True, I like writing One could also write “Set autobuy for VT/VWCE/SSAC, don’t ever look at it, ???, profit”. I mean these few words would basically solve investing for 99.99% of the population but that’d be boring wouldn’t it?
Aren’t you cherry picking the period?
I think most of us have seen the following chart:
Generally speaking I do not understand all of this panic or big disappointment from many of us. We are taking for granted the double digits yearly performances of a long period and we are feeling as if a hurricane hit us when there is a 10% drop. I feel like our greed has taken over us.
I am not in a position to lecture anyone. I am writing to remind also myself where I was getting involved when I decided to invest in the stock market.
- We cannot really know if VOO or VXUS or any other fund will outperform beforehand
- We cannot time the market in our favor consistently
- We are here for the long term. 10-15+ years
- We know that the World portfolio is very good (best?) for most of us (more or less - let’s not start debating )
- We expect 5-7% (you put the range) annual performance for a world index
- We know that this is enough for compounding to do its job
- We know that there will be periods where our portfolio will be 10%,20% and even 50% down
- We know that we need to choose our plan / asset allocation based on our risk profile
- We know that we should stick to our plan
- ++++
I think it is important to be mentally prepared for a big crash and a period of low returns(like the tech bubble and the following decade) and to continue investing according to the plan we made beforehand. It could happen this year or in 20 years.
I know, easier said than done BUT we knew that, no?
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I think we’re mostly in violent agreement.
All I meant to say that there’s many many millions of US investors who in their entire investment life have seen no benefit in diversifying outside the US for a long while. If they were diversified outside the US, their return sucked for a long time. And now they are surprised that the US market can correct while ex-US shoots the other way.
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If you need a dose of common sense, the great Morgan Housel helps out today on Twitter as follows:
The cycle:
First you assume good news is permanent.
Then you become oblivious to bad news.
Then you ignore bad news.
Then you deny bad news.
Then you panic at bad news.
Then you accept bad news.
Then you assume bad news is permanent.
Then you ignore good news.
Then you deny good news.
Then you accept good news.
Then you assume good news is permanent.
And you’re back where you began, ready for a new cycle.
(Source)
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I hope you are right. I have vested interest in world continue to remain global and not isolated. It’s just that everyday news comes out of White House and everyday it’s disappointing news.
Perhaps I am just naive but I always think that when something doesn’t look fair, it’s not fair. That’s it
I have to say. I have absolutely no problems with recessions, stock losses etc. they are simply part of investing. I just don’t appreciate the rule based order is being challenged on daily basis and sheer arrogance of power that is being displayed
I wonder if this was always the case but just happening in back end. Or we are really living in a different world
An extract from. New York Times article. Sums it up a bit.
For corporate America, including some major donors, the shock of Mr. Trump’s second term is that it turns out he really does believe the thing he’s been saying publicly for 40 years: Foreign countries are ripping America off, and tariffs are a silver bullet for America’s problems. When he says that “tariff” is the most beautiful word in the dictionary, he means it.
To Mr. Trump, tariffs are not merely a negotiating tool. He believes they will make America rich again. And they combine two of his favorite features of the presidency: They are a unilateral power that he can turn on or off on a whim, and they create a begging economy, forcing powerful people to come before him to plead for mercy.
This account is based on interviews with more than a dozen Trump administration officials and others familiar with the dynamic at the White House over tariffs. They asked for anonymity to discuss private conversations and deliberations
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