I would not put DJT into the day-to-day risk category, rather I see him as systemic risk. And investing in currencies other than the US dollar is definitely a way of (somewhat) hedging against that risk.
I don’t understand currency investing or hedging so I stick to stocks, very few bonds, and very few real estate funds. Like I just put some stuff in Vanguard and call it a day.
That has certainly been the winning plan for the last 20+ years. And is akin to what I do.
The concern is we’re dealing with a novel systemic threat that has no parallel in US history. But has plenty of parallel in the histories of other countries who’ve had massive government and financial turmoil upending their steady most status quo- flavored march to the future.
Maybe there’s some more advanced way to truly invest in currency but, so far as I know you’re just figuring that the exchange rate will change - either because people do/don’t want the local currency to do business in, or because the government is doing something inflationary/deflationary.
Either of those would generally not be a “buy and hold” sort of deal. If you know that the US government is going to print off double the amount of dollars and send checks out to everyone in order to reduce the wealth gap, for example, you might convert all of your US dollars into Yen, wait until after the checks have all been sent out and the money exchangers have halved the value of a dollar, and then you convert your money back.
Let’s run that through with some actual numbers. We’ll say that this is the state of the economy at the very beginning when the government decides that it wants to reduce the wealth gap.
You $8
Warren $8
Anne $1
Billy $2
Charles $1
Emmy $1
Jane $2
Sam $1
The economy has $24, total. They’re planning to print off a new $24 and evenly divide it between the people. E.g. they’re hoping to achieve:
You $10 + $3 = $13
Warren $10 + $3 = $13
Anne $1 + $3 = $4
Billy $2 + $3 = $5
Charles $1 + $3 = $4
Emmy $1 + $3 = $4
Jane $2 + $3 = $5
Sam $1 + $3 = $4
Since there will be twice as many dollars to trade for all the same amount of stuff, dollars would only be worth half as much. If a pizza used to cost $0.10 then now it should cost about $0.20. But really, that’s just an arbitrary number, either way. What matters from the government perspective is that the rich folk (you and Warren) used to be 8x richer than the poorest people and now you’re only 3.25x richer. You used to be able to buy 80 pizzas but now you can only afford 40. Anne could by 10 pizzas, now she can buy 20.
That’s the government’s plan, at any rate. But since you know that it’s going to happen, you convert to Yen first (we’ll say that $1 = ¥100).
So before the checks go out, the economy looks like this:
You ¥800
Warren $8
Anne $1
Billy $2
Charles $1
Emmy $1
Jane $2
Sam $1
(Plus a currency exchange corp holds your old $8)
Checks go out:
You ¥800 + $3 = ¥800 + $3
Warren $10 + $3 = $13
Anne $1 + $3 = $4
Billy $2 + $3 = $5
Charles $1 + $3 = $4
Emmy $1 + $3 = $4
Jane $2 + $3 = $5
Sam $1 + $3 = $4
(Plus a currency exchange corp holds your old $8)
Now you want to convert your Yen back to dollars. Officially, they’re worth $16 so somehow the currency exchange company needs to come up with that much money despite only having $8 on the books. They’ll have to borrow from the central bank, and pay back the loan, so they’re going to charge you money to convert back to dollars. Let’s imagine that they only give you $14, withholding $2 as their “profit margin”.
You $14 + $3 = $17
Warren $13
Anne $4
Billy $5
Charles $4
Emmy $4
Jane $5
Sam $4
You’re now the wealthiest person in America where, previously, you were even with Warren. That said, you went from having 8x the wealth as the poorest people and now you’re 4.25x richer. That’s better than the 3.25x that the government was targeting, but you still took a significant hit.
Ultimately, it helps to reduce the damage more than it acts as an investment.
That said, if you’re putting your money into actual investments in Japan, using your Yen, that the money can continue to grow on the back of successful, well run Japanese businesses under a stable, well run government that’s uninterested in “leveling the field”. Meanwhile, the US dollar stocks are likely to have dropped in value.
And while the ratio between you and the poorest shrunk, the middle class grew and the upper class shrank. There’s a lot of demand for middle class houses because a lot of people have middle class money. No one but you has “wealthiest person in the country” money. So if any of the wealthy go to sell their old house, it’s much easier for you to be the top bidder. The glut of middle classer drives down demand for the very top houses, lowering their price, since there’s too many of them relative to the distribution of money in the country.
Being the wealthiest person in the country has a way of expanding the 4.25x figure higher in some practical terms.
That MAGA doesn’t understand this is a wealth redistribution plan is amazing.
Trump wants to bring the very socialism he spent years claiming the Dems were planning.
To be completely fair, if the money is coming from tariffs then it’s more of an income redistribution maneuver rather than an inflationary measure. E.g. you tax everyone at a higher rate, pulling in a percentage of all sales into the government (so people who are able to afford buying more stuff pay in more) and then you send back out, evenly.
If that were the case then it’s not necessarily inflationary because you’re not inventing net new money. (That said, the cost of taxes will reduce demand - deflationary - but anyone who goes ahead to purchase stuff anyways might need to borrow against their credit to afford the tax, creating net new money via borrowing - inflationary. It has a variety of impacts that can swing things one way or the other.)
On the other hand, Trump was also shopping DOGE Dividends before:
https://www.axios.com/2025/02/19/musk-doge-dividend-check
Since the government has added costs more than it has cut them (despite the advertising to the contrary), those would have been net new money. There was no savings sitting around, free to send back out to the people.
And the fact that Trump seems very eager to send checks out to all Americans leads me to believe that DOGE or tariffs or whatever it might be, he’s going to try and send out checks under whatever excuse he needs. Ultimately, he’s trying to buy votes (or redistribute money among the proletariat - one or the other).
If the Supreme Court rejects his tariffs, he’s liable to still send the checks under the premise of DOGE or otherwise, and whether the money is a straight redistribution or net new.
Interestingly, I got to see this in great detail from the other side. My wife works in structured finance on these RMBSs and CDOs. A few years after the collapse the consulting firm I worked for was involved in a initiative with a group of all the big banks over several years testing a financial model that figured out how much money banks needed to keep in reserve trading these things so they could stay solvent.
I think what I find interesting is how these sort of things get abstracted out into numbers on a spreadsheet and expressions of risk without any real understanding of the underlying sources.
Coming back again to healthcare stocks … big movers today for the insurance/PBM/owning groups and facilities companies… not moving the direction they’d like though …
https://www.barrons.com/articles/dow-jones-industrial-average-unitedhealth-stock-maket-77b52f96
In my news feed I get the text -
Just look at UnitedHealth. The Dow tumbled more than 400 points, or 0.8%, Tuesday. The slide was almost entirely because the health insurer’s stock fell by almost 20%.
UnitedHealth, which reported earnings Tuesday morning, was hit by weaker-than-expected revenue and underwhelming guidance for 2026. News late Monday that the Trump administration was proposing a smaller-than-forecast increase in Medicare Advantage reimbursements only served to make investors even more nervous.
Shares of UNH rivals CVS Health, which owns Aetna, and Humana plummeted 14% and 21%, respectively, as well. Insurers Elevance Health, Centene and Molina Healthcare were also among the worst performers in the S&P 500 Tuesday.
Not feeling too sorry for them. Part of me wonders if this is a chance to pick up a bargain for a long term holder … but then I remember - oh yeah - evil. Still as cold hearted investments they are pretty tempting to me on a major drop.
Meanwhile precious metals just continue to tear.
I went in the 5 to 10 % gold etf allocation ten years ago mainly sold on its lack of correlation with other portions of my portfolio, defensively expecting an equities drop at some point and wanting some to rebalance into with. I was nervous that bonds might drop the same time.
I had never expected this!
Silver slowed down today but still slightly outpacing gold in the near term. I’m still more scared of silver dropping faster though. And apparently I am in knowledgeable company …
Evil? More for me! Lol. If the product is legal and bundled into a mutual fund, I’m ok buying it.
Oh I have no problem recognizing that I own evil companies by way of my funds. That is just reality. But for individual stock picking? Nah. Individual stock picking is something I do for fun with my play portion. If I beat the indices it’s a kick. I won’t have as much fun doing that by buying the Dark Side. And if it isn’t fun I may as well just keep it all in the low cost funds and etfs where I do just about as well.
That’s absolutely my position. Hence feeling fairly sanguine about my United Health stock’s performance since the amount I put in was below the maximum I’d be willing to lose.
And when one of my Australian gold miner stocks has doubled in six months, that helps too.
I did see that British Tobacco is a good, foreign dividend fund (~5% yield with an average of 7% price growth over the last 48 years).
That’s some dirty money, there.
About a year and a half ago, I had about $5000 in play money. Palantir just happened to nosedive around then, to about $22/sh. I had no idea who they were, except they were a big name in tech, so I bought 250 shares. Six months later the stock had doubled and I figured its run was probably over, so I sold 200 shares. Now it’s trading at $157/sh; pure evil, yeah, but I can’t stomach the tax hit if I sell.
It makes me think on my own track record - specifically the number of times I’ve had home run picks - but not for the reasons I had picked the stock - and the time my macro analysis was right but the individual stock was a whiff. The number of times I was right for the reasons I had thought? Very few!!!
For example, my current fairly out the park picks I chose for long term climate change related thoughts, electricity grid and climate control (AC systems) companies … went up mostly because of acute AI demands. Not why I bought them. Other side, years back felt strongly China would explode on the EV front and had bought a Chinese battery company with ties to auto companies. Right thought. Not the right company. Pretty much a total loss. So beating the indices yes, but mostly lucky rolls.
That’s pretty much my history too, at least at the conceptual level.
You’ve got to get the macro, the micro, and the timing right. And do that before the “smart money” does. And not be hit by a black swan flying past.
Tall order for a mere individual placing a small number of bets.
I have a small holding in a company that I bought really, really cheap. I know a bit about what they do, and I think they have some promising things in the works. At one point today it was up 130% before settling back to up 60-ish % on the day. Why? No idea. They are still early phase.
Seems most of us keep a little side pile for play-investing. I have to say, it is fun.
Same here: many good investments made, but most because of reasons I had not thought of or at least through. Serendipity. Many good insights that came to nothing. Wisdom, with hindsight. And several losses, of course. General direction: satisfying.
But will it last? Or will there be life left at the end of the money? Short of a cataclysm, it should work out, I am no longer young, the odds get better and better. I still sleep and eat well. What else could one ask for?
Rationality. It all feels so random without rationality.
I’ve had a few duds - I was expecting glp-1 agonists to go crazy so I invested in HRTS. As the value started to drop, I investigated and found out that since the older variants are reused diabetes medications, there’s a bunch of generics available so it’s hard to actually cash in on the craze.
(Looks like it’s back up to about where I’d initially bought it, now, but I’ve made the money back through other investments after trading out.)
But most of my big bets pay off. The one downside being that I tend to go relatively small on my “big” bets, so while I might double a good amount of money, it’s not “all” of my money, just a nice adjustment to my average growth rate which a hefty chunk in safer funds and other longer bets.
I don’t think this would really be a tax hit though. You’d still have significantly more money after paying cap gains taxes than before you invested. You’ve had them over a year so you’ll be paying up to 20% on the gains. Those 50 stocks should still net you over $5K at the 20% rate level. That’s about the amount you invested and you’ve already made a profit selling the previous 200.
At least that is my understanding of cap gains. You’ll have to stomach the cap gains taxes at some point.