The Markets and Trump

[Easto]

How is any industry supposed to plan and execute any long-term goal when Trump keeps moving the goalposts every other day? I'm feeling the pain of this in my investments. I have lost more money since he started in with all these antics than almost any other time except for possibly 2008. I'm planning on seeing any growth just flatline until someone is able to put some sense in his head.

[Philip]

By planning for volatility and tariffs, heh.
There are some pretty huge shocks to the economy/market for sure.
I am more into defensive positions, waiting it out, diversifying. This kind of cushions the blows, but still. I expect the whiplash huge up/down movements to continue, market may trend down for a while, who knows.

[Easto]

Fortunately I am also able to "wait it out" except I do have an IRA that has RMDs. I usually take more than the RMD, but so far it looks like I might be taking the bare minimum this year in order to reduce any damage

[Philip]

Market has been too hot for a couple of years, with the Trump trade war, it may be just the catalyst that pushes us into a bigger selloff, I don't know about recession. We shall see how this plays out, I would be very careful with investments.

Trump just said he will double tariffs on Canadian steel/aluminum from 25 to 50%.
https://apnews.com/article/trump-econom ... 9ead0907fa

Hopefully a ceasefire in Ukraine will happen, and have a positive effect.

[Easto]

I agree that my index funds had been growing and I wasn't quite sure why, but I took the win. I was preparing myself for the eventual pullback. But the "pullback" has accelerated by Trump's heavy handed cattle prod approach to the economy without any forethought or understanding about what he's doing.

[Leatherneck]

It's all about confidence. Give it a couple years. Reducing federal spending is like weaning an alcoholic and it hurts.

[Philip]

It's all about confidence. Give it a couple years. Reducing federal spending is like weaning an alcoholic and it hurts.

I agree with you it's about confidence, and balancing the budget is necessary, and a good thing. Even reducing the size of the federal government is a good thing. The issue is that out of the whole budget, all salaries combined are only ~4% (unlike private businesses, where it is often over 60% of expenses). Even if you fire everybody, you still wouldn't make a dent (maybe they will still need computers to mail checks ). Social Security, Medicare, Health, Defense, Debt Interest, those are the big ones they'll have to get into to achieve it, or they'd have to introduce more creative ways to tax us.

More tariffs won't balance it, closing the Dept. of Education won't either. By the way, Dept. of Education does not decide what's taught in schools, and the Federal student loans only subsidize interest for undergraduate college students while they're full-time in school. It is a good thing imho, it is an investment in the future of people, making them better contributors to the economy and GDP growth, those people in the future will be less reliant on social services and it is a cheap way to support future GDP growth.

[Easto]

I am all for eliminating/reducing any redundancies/efficiencies in government. It's just that I can't be convinced that someone/anyone can assess these departments and pinpoint where these adjustments need to be made in such a short amount of time. It appears to be "Cut Twice, Measure Once". I have worked at companies that have taken this attitude and although there might be some short term relief, it leaves the remaining workforce scared to the point where worrying about your future takes precedent over everything else. And as Philip has stated, the size of the disruption in relation to the benefits is usually not worth it, or giving you the results you would like to see.

Again, I'm all for eliminating waste. I just don't think the administration could have possibly taken a worse approach to it.

[Easto]

This is definitely not good.

[Philip]

The tariffs rollercoaster, heh.. Even Apple airlifted 600 tons of iPhones out of India to the US at the end of March to mitigate the effects of tariffs, companies don't know what their costs will be tomorrow.

Seems to me tariffs shouldn't be that complicated. You can't always try to use them as a negotiating tool, world caught up with that gig already, we destroyed relationships built since WWII.. Just put 10% tariffs on everyone, a few exemptions for trade partners and certain items we need, extra 50% on China, and be done with it. Just my 2c, whatever that's worth these days.

[Easto]

On top of all that there's an article in the news this morning that China has told its airlines to stop taking delivery of any Boeing aircraft. That's going to get someone's attention.

[Philip]

Yeah, totalitarian regimes at some point just dig in, regardless of what it will do to their economy, that's not their driving force.
China scares me much more than Russia though. Their economy/GDP is huge, they have more engineers than us, they have more factories than us, their work force is cheaper and more disciplined, they bring new products to market three times faster than the US/EU, and so on. Living there may be terrible for the population (no personal rights, freedom of speech/expression, low quality of life outside of big cities, etc.), but as a country, long-term economic goals seem more coherent than western countries.

Boeing may take a short-term hit, but they have so many orders they can't keep up anyway. Also there are only a couple of big players in their market and their stock has already been hammered with the 737 MAX issues, union negotiations, etc.

I am more worried about Intel turnaround plans, they've fallen behind a lot. AMD just announced 2nm EPYC server processors... Intel is still on 7nm technology.

[YeOldeStonecat]

We have to go through the pain...in order to do better for ourselves as a country and regain some self sufficiency (which is sorely...sorely needed).

Most people knew this was not a 1 month fix, nor a 3 month fix, nor even a 6 month fix. It's like trying to steer a battleship running full speed ahead..with just 1x of its rudders functioning!
This "mess" has been decades in the making. It can't be undone in mere months.

Other countries have had high tariffs against the US, so they can protect their markets. Why are they allowed to crush our exported goods, while they've had almost full free access to our market? Hasn't been fair! Why not treat each other equal?

While the "reported salary" officially on the books may be only 4% of our gov'ts budget....we all know the corruption and grifting is massively way off the charts! The amount of people exponentially getting multiples more salary through the money laundering machine of usaid...is insane!

We haven't had a President try to "trim the fat" in our gov't since....well, Reagan tried a bit. Every other President..kicked the can down the road.
Same with trying to save Social Security...just about all presidents except Reagan kicked the can down the road.

Our gov't is in big financial trouble. The rate of debt is skyrocketing..the bell curve is steep and getting steeper. It's already been known and discussed for years that Social Security enters troubled waters in 2034. They've been talking about having to take a % out of benefits at that time. Myself....I have 8x more years to work...my retirement is planned to start at 67. That puts me to start collecting SS in 2033. I don't want to just have 1x year of enjoying what I should be getting for SS...and then have 30% or whatever they're estimating...taken away because SS is not stable.

With the deep rooted corruption in the bureaucracy, things have to move FAST...the bull in the china shop approach is the only way. Else, if things are taken "slowly, carefully", the corrupt people have time to sweep things under the carpet, hide things, change, cover up, etc.

America needs to focus on healing itself, focusing on our problems, protecting ourselves....not being the open checkbooks to pay for other countries wars (driven by more corruption ..the war machine, the weapons lobby and spiffs to the politicians, etc).

The media has twisted the whole "immigration thing"....nobody is against LEGAL immigration. People don't have problems with that. If I were to move to The Bahamas, or the US Virgin Islands...I have to apply, go through proper channels, prove funding, or at least prove a job is awaiting me (often after giving locals first dibs on those jobs). I know England has similar rules, or at least "had"...a few years ago, friends of ours moved there, they had to prove a job and a fairly robust bank account to show the gov't they weren't going to be free loaders.
Why are other countries allowed to have and enforce immigration laws....but the US is blasted for...enforcing ours?

NATO...we've been on the raw end of that deal for decades....purely there to be an open checkbook for other countries.

Stock Market...this is not the only huge drop in recent years, go look at the stock market around Nov 2020....where market sentiment went down with Bidens election win. We also had another rather big drop after Dec 2022....until mid the following year. So our drop in the past 3 months..is no where remotely equal to the sum of those two drops. Not to mention, like Philip said, the market was ripe for a correction in the past 9+ months. It was falsely fluffed up middle of last year (typical for the 4th year/election year by the incumbent party), and of course...post election...inflated even more with market sentiment and positive feelings. So yeah a correction is fine.

As always, those who were going to retire within the next couple of years...hopefully they followed the standard best practice of lowering their risk tolerance and shifting funds towards solids like bonds. And those who are not retiring within the next 5 years or so...well, we play it smart and ride the market out. Realizing that "things are on sale now"...so buying things "now"..will realize bigger gains on those and we'll come out ahead, versus if the market was just a steady pace. The market waxes and wanes. Super high peaks are always followed by corrections. Investing is playing the long game. Unless you're retiring within a couple of years...then you just play it safe.

My 401k is still at 30.99% overall for gains since inception. Yeah...was cool to see it in the low to mid 40% area....but with that comes realization that...corrections always come, living the fast track of having my accounts cranking in the low to mid 40'% gains....is not a long reality. Even if this continues for another 5 months and I find it at 25% or 23% by September....I'll still be happy, I know it will return, and heck...a 401 that averaged that is pretty good, versus a bank..or even the official average of the S&P 500 which is what..10/11% (depending on what you read).

And, china is not our friend, their goal is being played out in the long game against the US, they are our enemy.