Right- and 40% of S&P 500 revenues come from ex-US markets, so there’s a reasonable argument to be made that you’re getting diversification anyway.
Add to that, with emerging markets you get markets like China. I’m not a fan because it’s not really free of government meddling.
Agree.
As we’ve gone around a couple times upthread, pre-trump everything you said was true. But there’s a new black swan risk in town. That of the USA really falling apart financially, commercially, or politically. Maybe as a consequence of a trump chaos agent shock to the system swirling out of control. Or maybe just because the US government is no longer to competent to manage a crisis they had no immediate hand in causing.
So now the choice becomes holding non-US assets exposed to a world with a USA in a death spiral, or holding US-only assets trapped entirely within a USA in a death spiral. I won’t say the Europeans and Asians wouldn’t get their hair mussed, but they might well be a lot happier with their financial outcomes than the purely US types would be.
But that can be said of the US as well. And I am not talking only of trump’s pressure on Powell and the FED. That is normal. The question is whose meddling is fairer, and from whose point of view. Five months ago I would have said it was the USA, of course. No brainer.
Today I despair. What is happening is fractally wrong, there is no level of understanding for me.
It was the main reason I put a modest allocation in GLD eight or so years ago: it seems to be best choice of an asset class with low correlation to the others. The traditional perspective that bonds function as diversification seems less true in recent cycles than historically, to my sense anyway. I’ve read some analyses that claim it is still generally true but I’m not convinced. And internationally? Yes it is all tied together. I am not convinced that being out of the US is much safer if the US equity markets collapse.
I get that. My version is a small allocation, under 10% of the total, that I play with. Individual picks I like for some reason or another. I consider it a win if I am keeping up with the S&P index over time and a huge victory if I’m ahead. (Which I am, barely.) But I keep it simple with the bulk of it. And even in the play around bit they are all long term holds.
Agree that this administration is more meddlesome than those of the past, but it’s nowhere near China on that regard. China invests directly into thousands of companies, and literally directs those companies (in many cases) as to what they work on. Also, in the US you can generally trust corporate reporting, and I don’t think you can in China.
I do the same, but its more like 2%. I didn’t mention it upthread because I don’t consider it material to my investment strategy.
Not convinced either. The beta of typical bond index funds seems to be close to 1.
Never been much of a fan of bonds. The ‘safe’ ones don’t pay significantly more than current MM rates, and if you go to lower credit ratings in search of yield, you are taking on maybe much of the same risks as stocks for a probably lower overall return.
But then what do you diversify with?
I still have some bond funds. And I have my 5 to 10% in GLD. Through my wife’s family we have commercial real estate partnership exposure. I don’t consider cash as diversification. Bitcoin? I suspect will travel with equity just more volatile.
What do the plural you use?
Yeah, I’m more in bonds than would be normal for me, but that’s just because of the current (possible) black swan in the WH.
But regarding this:
I wonder how much of that is that we’re 20 years into an era of free money. People are acting like rates are confiscatory, when by historical measure they’re really not that high.
To quote W H Auden: if I could tell you, I would let you know.
I don’t have any good ideas. We do have a bit of rental property though my general experience with that is it can be a lot of hassle.
Bitcoin? I’m still suspicious that’s a tulip bubble which will ultimately collapse to zero.
Hey, look! Tesla is about to cross the 300$ line for the seventh time this year! Wonder how far it will fall this time.
Anybody who could get in sync with that volatility would make out like a … bandit.
That’s actually pretty weird. Bad news for Tesla, and the stock dropped a little bit. Usually when there’s bad news for Tesla it zooms up.
I still have like 150 shorted shares which is a little silly. I should probably close them out. You definitely shouldn’t hold them as long as I have. I’ve just been waiting on one of the periodic crashes to get out, but I haven’t seen a good opportunity. Maybe I will now, because Elon will probably announce some random shit tomorrow like sex robots and Tesla stock will go up $50. $300 might be the best I can do.
I haven’t put money in the US market for a few months in long positions but google is actually kind of tempting. All they do is beat earnings, dominate their industry, and the stock price keeps going down. It kind of seems like insane value, but then I guess what would make it go up if its current performance isn’t making it go up?
Smallish Spanish armament manufacturer Indra Systems is my winner this year – it’s up about 85% since I bought it in April. Funny enough, I bought $2000 worth of carnival (cruise) stock because I took a Holland America cruise and if you own $2000 in stock you get free on board money, and that’s up 40% since then. I only bought the minimum $2000 so it’s not a huge gain, but it’s kind of cool that I got $250 of free on board credit in addition to the value of the stock going up $800. Win/win.
I’m still down massively on the year of course both from TSLA and betting that the market would crash faster after Trump’s destruction. Enough that I hardly pay attention to the market at all now and probably missed out on some opportunities. Shit makes no sense so I’m mostly done trying to make sense of it.
Since the passage of the BBB, I just thought that it merited pointing out that the stability of the Federal budget underlies the yield that’s demanded, in order to entice lenders to buy US debt. Less stable, higher yield.
That yield, generally, serves as the lower limit to any loan (mortgage, etc.) offered by American banks.
As the US budget becomes increasing unsustainable, you can expect loans to become more costly.
Not specifically related to Trump or tariffs, but my experience of dabbling in the markets is similarly volatile.
To put it in context, I’m talking about using maybe 2% of planned retirement funds for direct investment in shares, rather than managed funds. I’m not a US-based investor and use a share-trading app that gives access to US, Australian and New Zealand traded stock.
Best performer by far is Rocket Lab (+883%) followed by Berkshire Hathaway (+75%), which have been ‘buy and holds’, while I’ve more frequently held stock only long enough to make something like 20% return (e.g. Microsoft, Moderna) on a ‘bird in the hand’ sort of thinking.
I’m talking only hundreds, not thousands of dollars per stock, but it still feels good to ‘make’ $100 for little effort.
On the negative, my worst performer is Nuburu, which was worth $10.00 at its IPO when I got in. Trading halted when the price dropped and each share’s currently worth $0.31. So, yeah - not that flash.
A fair proportion of my picks have been high-risk, long-term payoff things: rare earths (MP Materials), biotech (Crispr) or gold mining. I remind myself that I’m statistically better off doing this than buying a lottery ticket, but some days I look at a stock like Illumina (-67%) and wonder…
All up, still showing a better return than a bank deposit and having fun learning. Especially about not believing the hype for every small cap wonder.
In my twenties, I figured that a lot of life would move online and so really everything becomes about basic habitation, screens, computers, energy storage, and robotized, high yield agriculture. Outside of habitation, which mostly needs concrete and thereby craggy sand - which is running out and thereby needs to be replaced with crushed stone - basically all of those need basic minerals and, as technology advances, more and more specific and rare minerals.
I invested in a lot of that, figuring that I wouldn’t retire for 50 years and so whether I know precisely when those needs will really start to crank up, it should be by then.
Then I realized I should do some stuff during my regular life like put a down payment on a house and build money for the kids to go to college, and so on. Knowing that I’m good for retirement may be good and all but those stocks were basically all flat and were liable to stay flat for decades.
At some point, those stocks will start to pick up and, perhaps, even become the top growing equities. On that day, I’ll have picked correctly.
But, if you think about that, any index fund that simply invests in what’s growing at a high rate will, likewise, glom onto and rise because of the innate need for rare earth minerals and crushed rock when that time comes. And in the meanwhile, my cash ain’t doing nothing. Oh yes, so clever of me to foretell the future. But I was still being too clever by half.
Good investing probably does involve some amount of understanding the pressures and goings-ons of the world, but mostly it’s about being smart about investing itself.
It’s like, if you learn how to maximize your results at sports betting, poker, and mahjong, then that’s great and all but if you simply be the person to run the game and win no matter what, that’s really just more to the point and more dependable.
Tesla Grants Musk $29 Billion in Stock to ‘Keep Elon’s Energies Focused’. The share rises. NYT gift link:
https://www.nytimes.com/2025/08/04/business/tesla-elon-musk-29-billion.html?unlocked_article_code=1.bk8.4k46.gxKFrMXWfWAg&smid=url-share
The shareholders, whoever they are, are buying that he is essential to tesla’s success. Well, words fail me.
His existing stock holdings aren’t enough to keep him engaged?
I believe he holds currently 13% of tesla, with this new “package” he will be up to 20%. He is not doing it for the money, you know. It is to fend off “activist investors” who could demand that he be sacked. That is easy when he only holds 13%, but impossible when he gets up to 20% (plus what his brother and other friends & family hold).
What makes me wonder is that after this and after the ruling on friday that tesla has to pay 250 million US$ for an accident involving “full self drive (FSD)” (and probably more to come, despite the evident appeal) the stock is still rising today.
“Get rich slowly”…still the best investment advice I’ve heard
I’m kind of joking but honestly, rather than paying Musk $30 billion in stock to remain focused on the company, they should pay him that much to go away. It really might be best for the company instead to hire someone else, perhaps someone with a background in the auto industry.