I mean this is in the Executive Order itself:
> The heads of independent regulatory agencies shall establish a position of White House Liaison in their respective agencies.
That is straight up Soviet playbook to have central party liaison everywhere.
As Buffett said when interviewed in the wake of the Financial Crisis and his interventions like saving Goldman Sachs and Bank of America but letting Lehman Brothers die (paraphrased) “(in the free market) Nobody has to do business with anybody else, it’s all based on trust, if people didn’t trust Berkshire to do business with us we’d be worth zero”.
Expanded, part of the reason US stocks command a premium is because most of the world trusts that American supervision, regulation and reporting is trustworthy by being independent, transparent and reliable. If this trust breaks it’ll get ugly for everyone.
As it’s said in the reddit comments: the last month looks like an all-in.
For the moment the Executive Orders are only “wishful thinking” but there is no predicting what will happen when the court will block this order. They may carry on to implement it disregarding the court order. There has been precedents of presidents ignoring court orders (and not only trump in the past few weeks).
There’s not much new tho, it’s long been a theory for the current admin that there shouldn’t be independent agencies (executive should control all agencies), they already started that in the first term (eg EPA). They do those moves so it can go to the supreme court (which will likely agree).
I don’t think markets will care, as long as the fed independence is untouched. Companies aligned with the administration (which is most US companies even those not traditionally aligned are making signs) will benefit from deregulation/less oversight.
Though I understand people might want to divest for other reasons, but it’s not something that I’d want to discuss (thread will quickly turn political)
The Federal Reserve is not fully independent though, and is only partially excluded: President cannot decide policies, but can decide to supervise the conduct of the board of governors, aka firing them if they are not loyal enough:
The term “independent regulatory agency” shall have the meaning given that term in section 3502(5) of title 44, United States Code. This order shall not apply to the Board of Governors of the Federal Reserve System or to the Federal Open Market Committee in its conduct of monetary policy. This order shall apply to the Board of Governors of the Federal Reserve System only in connection with its conduct and authorities directly related to its supervision and regulation of financial institutions.
Again I’m not saying that this will tank the stock market; it could very well make it roar up.
This is NOT the reason to sell (for me personally). In my investment strategy plan I wrote that I will invest in the Developed World only. Personally what is happening is too shady and if such policies are enacted, I must think if I can consider the US a fully “developed world” stock market.
I’m not timing the market or hoping to make a gain or avoid losses; I’m merely trying to understand if the US can still be considered a “developed market” with fully independent supervision of the stock market, monopolies etc or not.
I wonder when the army will intervene…
The army defends the constitution not the president, so if all this onion-like stuff keeps going on, who knows.
edit: oh sh*t…political. feel free to remove my post.
To all cash holder (like kind-of me)… YTD for chspi and many other is +10% …
Indeed, US laggs behind, everything else grows this year. People shifting away from US?
CALM dropping like a stone:
If it hits the 50 or 200 day moving average, I’ll buy.
I am thinking of adding a value factor to my existing portfolio that consists of mainly Global weighted etf (75%) and a mix of quality factor etfs (25%). I have the capacity to add additional funds this year so this value etf would be 15% of new portfolio composition.
I am thinking about AVGV
any feedback to this? or should I add additional funds in the same proportion as my existing portfolio?
Weightings for something like this are personal preference essentially. Comes down to acceptable tracking error (to the benchmark/VT), acceptable volatility and how much conviction you have in the factors.
Other than that, AVGV is a great fund imo and 15% sounds like a reasonable addition here.
AVGV targets all caps value - Is that what you are aiming for, or would like to have only small caps?
So one of my friend was asking if there is any difference in terms of “safety “ of funds between following
European ETF provider , domiciled in Ireland (for example WEBG)
Vs
US subsidiary, domiciled in Ireland (for example VWRL or FWRA)
I couldn’t really answer this with any rationale because I believe this all depends on chain of custody. And I don’t have much knowledge about ability of foreign companies domiciled in Europe to block funds of their investors
But how should this be analysed?
If US goes rogue, is there any real difference for the amount invested in ETFs based on fact that Vanguard is American while Amundi is not?
As part of counterparty risk mitigation, I spread my eggs between the 2 baskets Vanguard and Amundi, regardless of the current situation. There are many risk factors that can influence a company (headquarter): politics, economy, natural disaster, power outage, cyber attack, etc.
Thanks
But this means you don’t think there is any reasonable difference between a European company or a European subsidiary for all practical purposes
Right?
I think there is a huge difference between a headquarter and a subsidiary, even if they reside in the same jurisdiction. Vanguard is an American company with a different culture from Amundi. If either Vanguard or Amundi mess up, all their respective subsidiaries will be impacted, regardless of location. Look at Credit Suisse or Lehman Brothers.
not only looking for small caps but having small caps in this mix is essential.
I know there will be a lot of overlap with the market cap weighted and all cap value stocks but this will allow to balance the weights of individual stocks in the portfolio.
the addition of another factor is not primarily to beat the market but to be an effective hedge against drawdowns or periods of low market growths.
I don’t need this money essentially for the next 10-15 years so can keep investing for a period of time consistently.
actually I had a rethink of my portfolio composition and now am taking steps to get to
global cap weighted - 55%
Quality - 22.5%
Growth - 5%
Value 17.5%
is this too much factor tilt? or I could forget all this by simply keeping 100% VT?
according to my quick calculations, my new allocation reduces the variance by 1% while adding an additional 1% annualized gains (all this based on theory and past performance, but this could be completely off in the future)
The only new addition to my portfolio is the value factor and I have rebalanced the weights.
Also, was kind of also influenced by this video to relook at my portfolio composition
P.S: none of the ETFs in my portfolio are from Dimensional 
I personally think as long as you are well diversified, you would be fine and have similar returns. The tilts etc are just historical results and have no proof of sure outperformance
So focus should be on peace of mind, simplicity and cost of running a strategy
However just that you know -: when Ben Felix is talking about “market” . He is not really talking about VT or World market cap weighted ETFs .
He is referring to one market like US stock market or European stock market etc
His own recommended portfolio is actually 1/3 each exposure in US stocks, Canadian stocks and Rest of the world
