As I’ve mentioned in other threads, I’ve got some cash savings that I’d like to do more with, still being a decade plus away from retirement age. I’ve been planning on putting a chunk into my Vanguard index fund, as o usually do during tax time.
However, current events have given me some pause.
For one thing, given recent executive statements about recent market conditions, am I helping the administration or taking advantage of their bellicosity if I invest now? It feels reeeeeally off putting to me, but this is my future, that I’m personally responsible for; how much of it am I expected to sacrifice for the greater good? And I know I’m not supposed to try to time the market, but can I ignore what’s going on?
On the other hand, I have little idea if I’d truly be betraying my political beliefs by investing now. If not, I’d be letting Trump dictate my future (more than he already is) and losing out on security for nothing.
Which brings to mind taxes. I’ve been thinking about this seriously. I hate much of what my tax dollars are funding, but even now, a lot is still being spent on things and people that I agree truly need help. Am I wrong to be concerned with future penalties or the unlikely prospect of prison by making a statement through the IRS?
Then there’s the question of whether any of this is relevant or if I should liquidate retirement accounts that I’ll never use and buy, uh, personal defense instead.
How are you all putting your money where your mouth is, for these or other issues? What assumptions are you making about your personal future? How do you navigate the complex connections between the personal and the public?
I’m in my mid 40s, so I have plenty of time to ride this out. In the mean time I’m just leaving my scheduled buys in place and added a few new ones. On the assumption that the market will not only recover, but climb higher over the next 20 years, buying while it’s lower seems like a good idea to me.
I can’t tell you how I’d feel if I was investing needle moving amounts of money but tossing a few hundred or a few thousand dollars at an investment isn’t likely to change much for anyone other than you.
Are you asking if you’d be risking jail time or penalties if you don’t pay your taxes…yes, yes you are.
I, obviously, don’t know how much you have in your retirement account, or anything else about your finances, but guns aren’t that expensive ($500ish). If you’re low enough on cash that you need to take money out of a retirement account to buy one, you might consider if that money could be better spent elsewhere.
In any case, I think you’d do well to sit down with someone that can look at your finances as a whole and help you make some decisions.
Unless you’re wielding the sort of cash that actually affects markets, I don’t feel like you have any obligation to really consider your effect on the geopolitical situation or anything like that. Your goal is to maximize your return on investment.
You might however, choose not to invest in companies that aren’t aligned with how you think the country and world should work. Like say, not in Russian ones, or defense industry, or in alcoholic beverage companies.
I don’t believe in socially responsible investing but respect those who do. One problem is that it could be hard to find a fund that excludes exactly the kind of companies you are uncomfortable with.
I am going a little less on American stock index funds because of Trump. So in Vanguard-speak, you could put less in VTI (essentially the whole U.S. stock market, except maybe penny stocks) and more in something like VEU (Vanguard FTSE All-World ex-US ETF).
However, a lot of the companies in those indexes, and almost all of the big ones, are multi-national, with exposures both in and out of the U.S.
P.S. Another way of socially responsible investing would be to vote your shares for directors and proposals that meet your personal values. This is complicated, and I do not bother. But there are some options. Google Vanguard Investor Choice.
Just noting that a lot of political discussion both here and elsewhere is fundamentally about whether this assumption will hold true, which is the basis for much of this discussion, in my opinion.
For the most part, regular people like us really can’t know. If we did, we’d know what to do and we’d all be rich.
In your OP your question was “What assumptions are you making about your personal future?”. My assumption about my personal future is that the market will recover and climb higher before I retire and, based on that assumption, I’m continuing to throw money at it.
Something worth keeping in mind, IME, is that people discussing (journalists, radio hosts etc) the market tend to be very, very short sighted. Back when I used to listen to stock market/investment radio shows, it seemed like at least once a week the stock market was the ‘highest it’s ever been’ and ‘can’t possibly go any higher’ and ‘we’re due for a correction’ and ‘it’s going to tank sooner or later’…constantly. And back then, the DJIA was 10,000 points lower than it is today. That was one of the big reasons why I stopped listening to them. It was always the best day ever or heading for a recession. Not much in between. It’s like the shows are aimed at day traders that are more worried about what’s going to happen in the next few hours than the next few months or years.
But this is why I’m suggesting you find someone to sit down and talk to. They can look at your finances as a whole as well as what you want to do and are able to do moving forward and come up with a plan that works for you. Plus, it gives you one, hopefully level-headed person to listen to instead of all kinds of contradictory and probably wrong information you’re going to get from random people on the internet like me.
The problem is finding someone whose financial interests are aligned with yours, and who has good judgment, and has expertise in market behavior and portfolio theory. Most people like that are not going to sit down and talk to you, for free. And the people who do it for money mostly want to argue against academic theories AKA the evidence.
This book, by a retired economist once responsible for Princeton University’s endowment investment strategy, is the best book I’ve seen on how to think about this:
If you don’t want to know the theory, but just want some reasonable advice from disinterested experts, see:
The advice in the above sources would of course have to be combined with something else if you want your investments to have some connection to your politics. As I said before, Vanguard customers – specified as the investment company in the OP – can check out Vanguard Investor Choice to vote their shares consistent with their values.
I would argue that staying out of the market is playing into Trump’s hands even more than investing is. The more stock little guys like you control, the less the fat cats do. Just stay away from specific investments that have a direct connection to Trump and company, and you’re morally in the clear.
The obvious one there is to avoid the stock of Trump Media & Technology Group Corp. (NASDAQ DJT). Is that all you mean?
For U.S. investors who want to diversify to the max, like me, this means making some compromises.
One pretty-good option is the S&P500 (Vanguard VOO). Traditionally it maps pretty tightly to broader indexes of U.S. stocks (those, like VTI, have DJT), but if I recall correctly this is no longer as true. Good news: AI tells me DJT is pretty far from meeting the S&P500 criteria.
One could also stick to non-US indexes.
Problem for me: Getting out of anything with a tiny DJT exposure would generate too much taxable gains in a single year. And then, in a few years, maybe DJT will be in the S&P500
Question for anyone: Do socially conscious broad-based index funds (they exist, right?) have a special rule to keep DJT out, or is he kept out with some existing rule?
That’s the most obvious one, of course, but you might also want to exclude NewsCorp, and whatever name Halliburton is using now, and depending on your views, possibly Musk’s companies, and so on. But the point is, exclude specific companies; don’t exclude the market as a whole.
