I hate it, every day some new bullshit adding volatility to my investments. OK, I gain in some strategies from volatility, but it is always hard to stomach it. But that will never, I repeat, never, change the way I invest.
There has been no crash with announcement. OK, some people announce crashes all the time and sometimes just have to be right, but that is another story.
I cannot remember a single moment of my lifetime where there was no war. The last war in Europe before Ukraine was 30 years ago. The stock market usually rises âwhen cannons fireâ. The stock market usually rises anyhow over a periods of two to three decades.
BTW: since the 80s I say that VAT are very bad for any business. A business that has maxed out sale prices and makes less than the VAT amount goes bankrupt and ceases to exist only because of this stupid tax. Now the USA says that it will be implementing taxes at the same height that other countries do. The target should be to quit those taxes everywhere, it did hurt us long enough! But in the meantime it will hurt us even more.
Now the rapidly changing US policies have no impact on my investing, I invest in a mechanical way and do always the same in the same situation.
Valuations might be on the higher side (but have been for years).
While there might be a lot of noise from Trump, in the end, I see mostly positives for the stock market. His last term was noted for de-regulation and tax cuts and the same is happening again.
I believe there are risks involved with over exposure to US market at this moment. Not because of valuations . But because of geopolitical situation.
I am not sure whatâs the right exposure to US stocks. But 60-65% seems too high (world market weight). Everyone should make their decision on how much exposure to one country is acceptable.
Investors have a tough choice to make though. US markets are large and not easy to ignore. However if US was not such large market, people would have simply sold off their positions by now.
My view is that market doesnât always move with profitability. It moves with sentiments. Even if market in US falls 20% , the valuations will still be decent.
I have no idea on how the profit will move. But the question is if itâs wise to have 65% exposure to fortunes of companies listed in one country?
UCITS are mostly Irish domiciled entities to which Irish law applies. When you buy WEBN/G, formally you buy an Irish security.
For example, if you die, your heirs will not have to deal with the Irish tax authority, as they donât impose estate taxes. In case of VT, which is a US security, they will have to deal with the IRS.
If one imagines unimaginable, like confiscation or asset freezing, WEBG will shield your non-US holdings, while VT creates 100% exposure to the whims of the U.S.
I just donât see why not? Everyone is entitled to his/her opinion about valuations though. I personally donât care, or better said, have learnt not to care.
Apart from political risks like confiscation i donât see reasons to tinker with the allocations.
Countries like Serbia wonât impact your MCW by expropriation and sanctions. Russia did slightly, and the USA would eradicate more than a decade of gains.
I just donât think that local conflict compares well to this escalating conflict between imperial powers we have at hand.
Someone might make bank, which doesnât mean that you can participate.
I donât want to enter politics, just to say that this is impossible: I did already spend it and could lose 100% (which is impossible) and still be in the green. The Spaniards have a saying for that situation: âque me quiten lo bailado!â.
Now, after the 2nd world war U.S. companies did pay all dividends afterwards, even to German stockholders. And that is where most of my investments are.
Guys. Stay away from the news. Keeep buying VT!
All this overload of media without any real information is clouding judgement. Zoom out on the stock market charts and see this all doesnt matter in 10, 30, 30 yearsâŠ
The real danger is not beeing invested in productive assets.
Weâll see. Personally Iâm even contemplating what should be unthinkable: whether the US Govt defaults on some of its debt (bonds), given the unhinged, all-in way the elected and unelected US leadership is acting.
The nearest we got to was maybe accidental default due to debt ceiling political brinkmanship, but a true failure to pay should never happen.
Maybe there is some increased risk with Musk poking around in systems and firing key people. Maybe a payment is not met accidentally due to people or systems being broken?
Who was the USA after WW2 and who are they feared to be this time? Do you think those two value stability and keeping promises the same? Expropriation does happen, empires do fall, the winners donât have to be democracies.
I think, we are complacent in a nothing-ever-happens dream. Even cheap downside protection, like
shifting from VT to VTI+EXUS+EIMI (+0.01% TER, missing 3.4% World ex-US SC),
or broker diversification,
is brushed away. It is undeniable that the risk has risen to the level of a possibility. Those are the pennies in front of the steamroller that we have been warned about. Uncompensated idiosyncratic risk.
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