Instead of the wrongheaded "Sell America" slogan how about "Embrace Diversity"? That's certainly one of the key lessons Jonathan Clements always tried to drum into our heads over the years as he steadfastly stuck with global market cap weighing in equities while the U.S. went on a long-lasting tear. I do think, however, that current macroeconomic and political trends mean that additional diversification in investments may be worth considering. One can, for example, diversify away from the U.S. Total Stock Market indexes (recently reclassified as un-diversified due to their dependence on a handful of mega-cap tech stocks for their returns) using international and/or small cap equities. But unprecedented deficit levels combined with active undermining of both the independence of the Federal Reserve and crucial government data reporting used for indexes like CPI do, together, arguably constitute "it really is different this time" challenges to the American exceptionalism we U.S. investors have always relied on (as shown by the historical home country bias in both stocks and bonds held by even the most globally-minded investors). The huge tear that gold has been on for almost two years now is certainly a telling barometer of increasing levels of global lack of faith in U.S. Treasuries and the U.S. dollar. Not being a fan of that sort of speculative investment myself (especially at nearly $5000 an ounce) I find myself with renewed appreciation of Jonathan's recommendations and choices for his own portfolio: market cap weighted global equities as appropriate for one's need and ability to take risk and a "barbell" of short-term Treasuries (he used VTIP and VGSH), with either a TIPS ladder or annuities (he favored the latter) to provide an income floor starting around age 70. He wasn't betting against the United States - he was betting on the best companies in the entire world innovating and producing value. For those wanting to put things on autopilot (usually a wise idea - especially as we age!) maybe Vanguard's often-pilloried all-in-one LifeStrategy funds are having their moment in the sun. Globally-diversified in both stocks and bonds, 60:40 U.S. to international across the board, automatically rebalanced, low-cost. And hey, their Target Retirement Income Fund (VTINX) even includes a meaningful slice (17%) of TIPS. Maybe "VTINX and chill" will be the risk-averse retiree's motto going forward.
The story of gold and its possible role in portfolios is more complicated than this. Here's the best article I've read on the topic: https://portfoliocharts.com/2020/08/21/metal-money-and-the-measurable-value-of-gold/ I think best to think of gold as an insurance asset that, in modest amounts, can reduce sequence of returns risk and hedge against market meltdowns and ongoing currency debasement. That said, I much prefer globally diversified stocks combined with high quality bonds; the only gold I own is a wedding ring
Thanks Mr. Grossman for this timely post! The only thing I would add in terms of assessing one's tolerance for stock market crashes is that preparing for their duration is at least as important as the percentage drop. A seasoned financial advisor I used to work with suggested imagining that stocks decline in value by 50% and require 10 years to recover as a valuable exercise in assessing one's risk tolerance. That may seem bleak but that's where market history is helpful. Here's a summary of U.S. stock market drawdowns I like to refer to. Of course it's also important to remember that the future is under no obligation to follow the past - which means preparing for both much worse and much better outcomes - and that stock market crashes and drawdowns outside the U.S. (see Japan, Germany) have been much worse. There are no guarantees that U.S. exceptionalism - or our status as the world's reserve currency and debtor of choice - will continue. https://www.northerntrust.com/content/dam/northerntrust/pws/nt/documents/commentary/wealth-management/a-history-of-drawdowns.pdf
As Langston Holland mentioned only Fidelity among the major brokerages has an account lockdown feature that prevents unauthorized ACATS transfers. There has been MUCH discussion of this issue on Bogleheads and other forums. Honestly there's no excuse for other brokerages not offering this feature. That said, I think it's still prudent to have assets at more than one brokerage as a hedge against cyberattacks or otherwise not having access to your account for a period of time (and this does happen fairly often). IMHO the choices in order of preference are Fidelity, Schwab and Vanguard.
Thanks very much for sharing that WSJ article! William Bernstein, Jonathan Clements, Rick Ferri and other leading investment experts recommend only holding Treasuries, while Professor Edward McQuarrie ("McQ" on the Bogleheads forums) did an exhaustive study recently comparing intermediate-term treasuries (VGIT) to Vanguard's Total Bond Market fund (BND) that showed conclusively that ITT's are superior to funds like BND that not only dilute Treasuries with lower-quality corporate issues but also have nudged their duration out to ~7 years, thereby exposing investors to considerably more interest rate risk than a true intermediate-term (5 year) fund. Bottom line from Dr. Bernstein: a TIPS ladder is the only place for long-duration bonds; otherwise use short-term Treasuries only and take your risk on the equity side. Personally I keep of couple of years of residual living expenses in GOV and split the rest of my bond holdings equally between VTIP (short-term TIPS) and VGIT. Like you I see the silly pop-ups from Vanguard urging me to consider dollar-hedged international bonds but their own track-record after using them in their target retirement date and LifeStrategy funds just shows that they add complexity for no additional return. Too bad they didn't choose to include TIPS in any of those funds beside Target Retirement Income instead, as VTIP has out-performed all of their other bond funds since inception and short-term TIPS actually do offer meaningful diversification - especially for retirees.
I'm both a minimalist and a cheapskate so here's where I've ended up: Fidelity as our primary brokerage AND bank, Schwab as a back-up. Why? Fidelity is the only one of the three major brokerages that has a lockdown feature to prevent fraudulent ACATS transfers, plus (unlike Schwab) they pay competitive (with high-yield savings accounts) interest on sweep funds in money market accounts. They also offer a Visa credit card whose cash-back feature nets us several hundred dollars a year since we charge everything we can on it and pay it off monthly, along with a debit card that reimburses transaction fees worldwide. Good luck finding a bank that offers these benefits. Given the omnipresent threat of cyber attacks temporarily impeding account access I think it's prudent to have at least one backup brokerage. Schwab fulfills that role for us nicely. By intention and design their yields on both bank savings and checking accounts and sweep money market accounts on the brokerage side are pitiful, so we keep a bare minimum in savings and checking there (which gives us a second debit card to use which like Fido's reimburses us for ATM fees worldwide) and remaining cash in SGOV. Finally, on the investing side, we hold almost exclusively Vanguard ETFs at both brokerages, thereby taking advantage of the one thing Vanguard does well (running low-cost funds) while sidestepping their lousy customer service, primitive website and tools and so-so security. IMHO two great brokerages make regular banks and credit unions superfluous.
Thanks for this! The link to the NYT article appears to be broken in your post so here it is as a gift article in hopes at least a few non-subscribers can read it. https://www.nytimes.com/2025/11/07/opinion/donald-trump-great-gatsby-roating-20s-sec.html?unlocked_article_code=1.zk8.PHMi.y57GHvU02KcT&smid=url-share
Responding to R Quinn's numerous uninformed comments, here's an up-to-date ranking of world health care systems. The U.S. doesn't fare all that badly (except for being in a league of its own for inefficiency and high costs) but it should be obvious that it is in no way an appropriate thing to be crowing about. What it comes down to is that civilized countries view health care as a right - just as they do transportation infrastructure, clean air and water and so on. What we have instead is what the French call "capitalisme sauvage" - unbridled prioritization of money making hand over fist by a few at the expense of the common good. https://www.usnews.com/news/best-countries/rankings/well-developed-public-health-system
Thanks for the timely reminder! One useful rule of thumb I learned from an advisor many years ago is to imagine that your equity allocation suddenly loses 50% of its value and doesn't recover for a decade. If you could still live well under that quite realistic worst-case scenario then your stock percentage is reasonable. Also of note is that both Vanguard and Morningstar are currently recommending 30-40% in equities and the rest in bonds along with a slice of cash for short-term needs as the risk:reward "sweet spot" starting point - essentially turning the classic 60:40 on its head. This is because bonds are (finally) offering a decent real (above inflation) return, while, as you point out, stocks are very richly valued. In that regard though, it's only the U.S. market, in which the Magnificent 7 have a total market share of 40%, that's overvalued. Jonathan Clements' advice to own the TOTAL market - including international equities at global market cap (currently around 35%) has never seemed wiser. Thanks as always Mr. Grossman for your excellent writing.
Great article that I hope will be widely-read. Thank you for writing it! Berkshire Hathaway's legendary Charlie Munger's take on Bitcoin sums things up nicely - and memorably: "I think it's rat poison," he famously said in 2013, when Bitcoin was worth $150. When asked to revisit his comments five years later, when the world's largest cryptocurrency was trading at $9,000, he said, "So it's more expensive rat poison." When pressed on the returns some Bitcoin investors were able to make, he called them "idiot booms" that harm the U.S. "In my life, I try and avoid things that are stupid, and evil, and maybe look bad in comparison with somebody else," he said in 2018. "Bitcoin does all three." "It's stupid because it's very likely to go to zero; it's evil because it undermines the Federal Reserve system... and third, it makes us look foolish compared to the communist leader in China," he explained. "[Xi Jinping] was smart enough to ban Bitcoin in China... we are a lot dumber."
Comments
Instead of the wrongheaded "Sell America" slogan how about "Embrace Diversity"? That's certainly one of the key lessons Jonathan Clements always tried to drum into our heads over the years as he steadfastly stuck with global market cap weighing in equities while the U.S. went on a long-lasting tear. I do think, however, that current macroeconomic and political trends mean that additional diversification in investments may be worth considering. One can, for example, diversify away from the U.S. Total Stock Market indexes (recently reclassified as un-diversified due to their dependence on a handful of mega-cap tech stocks for their returns) using international and/or small cap equities. But unprecedented deficit levels combined with active undermining of both the independence of the Federal Reserve and crucial government data reporting used for indexes like CPI do, together, arguably constitute "it really is different this time" challenges to the American exceptionalism we U.S. investors have always relied on (as shown by the historical home country bias in both stocks and bonds held by even the most globally-minded investors). The huge tear that gold has been on for almost two years now is certainly a telling barometer of increasing levels of global lack of faith in U.S. Treasuries and the U.S. dollar. Not being a fan of that sort of speculative investment myself (especially at nearly $5000 an ounce) I find myself with renewed appreciation of Jonathan's recommendations and choices for his own portfolio: market cap weighted global equities as appropriate for one's need and ability to take risk and a "barbell" of short-term Treasuries (he used VTIP and VGSH), with either a TIPS ladder or annuities (he favored the latter) to provide an income floor starting around age 70. He wasn't betting against the United States - he was betting on the best companies in the entire world innovating and producing value. For those wanting to put things on autopilot (usually a wise idea - especially as we age!) maybe Vanguard's often-pilloried all-in-one LifeStrategy funds are having their moment in the sun. Globally-diversified in both stocks and bonds, 60:40 U.S. to international across the board, automatically rebalanced, low-cost. And hey, their Target Retirement Income Fund (VTINX) even includes a meaningful slice (17%) of TIPS. Maybe "VTINX and chill" will be the risk-averse retiree's motto going forward.
Post: Sell America
Link to comment from February 14, 2026
The story of gold and its possible role in portfolios is more complicated than this. Here's the best article I've read on the topic: https://portfoliocharts.com/2020/08/21/metal-money-and-the-measurable-value-of-gold/ I think best to think of gold as an insurance asset that, in modest amounts, can reduce sequence of returns risk and hedge against market meltdowns and ongoing currency debasement. That said, I much prefer globally diversified stocks combined with high quality bonds; the only gold I own is a wedding ring
Post: Gold Isn’t Special
Link to comment from January 10, 2026
Thanks Mr. Grossman for this timely post! The only thing I would add in terms of assessing one's tolerance for stock market crashes is that preparing for their duration is at least as important as the percentage drop. A seasoned financial advisor I used to work with suggested imagining that stocks decline in value by 50% and require 10 years to recover as a valuable exercise in assessing one's risk tolerance. That may seem bleak but that's where market history is helpful. Here's a summary of U.S. stock market drawdowns I like to refer to. Of course it's also important to remember that the future is under no obligation to follow the past - which means preparing for both much worse and much better outcomes - and that stock market crashes and drawdowns outside the U.S. (see Japan, Germany) have been much worse. There are no guarantees that U.S. exceptionalism - or our status as the world's reserve currency and debtor of choice - will continue. https://www.northerntrust.com/content/dam/northerntrust/pws/nt/documents/commentary/wealth-management/a-history-of-drawdowns.pdf
Post: 2026 Financial Plan
Link to comment from January 3, 2026
As Langston Holland mentioned only Fidelity among the major brokerages has an account lockdown feature that prevents unauthorized ACATS transfers. There has been MUCH discussion of this issue on Bogleheads and other forums. Honestly there's no excuse for other brokerages not offering this feature. That said, I think it's still prudent to have assets at more than one brokerage as a hedge against cyberattacks or otherwise not having access to your account for a period of time (and this does happen fairly often). IMHO the choices in order of preference are Fidelity, Schwab and Vanguard.
Post: 2026 Financial Plan
Link to comment from January 3, 2026
Thanks very much for sharing that WSJ article! William Bernstein, Jonathan Clements, Rick Ferri and other leading investment experts recommend only holding Treasuries, while Professor Edward McQuarrie ("McQ" on the Bogleheads forums) did an exhaustive study recently comparing intermediate-term treasuries (VGIT) to Vanguard's Total Bond Market fund (BND) that showed conclusively that ITT's are superior to funds like BND that not only dilute Treasuries with lower-quality corporate issues but also have nudged their duration out to ~7 years, thereby exposing investors to considerably more interest rate risk than a true intermediate-term (5 year) fund. Bottom line from Dr. Bernstein: a TIPS ladder is the only place for long-duration bonds; otherwise use short-term Treasuries only and take your risk on the equity side. Personally I keep of couple of years of residual living expenses in GOV and split the rest of my bond holdings equally between VTIP (short-term TIPS) and VGIT. Like you I see the silly pop-ups from Vanguard urging me to consider dollar-hedged international bonds but their own track-record after using them in their target retirement date and LifeStrategy funds just shows that they add complexity for no additional return. Too bad they didn't choose to include TIPS in any of those funds beside Target Retirement Income instead, as VTIP has out-performed all of their other bond funds since inception and short-term TIPS actually do offer meaningful diversification - especially for retirees.
Post: Which bond fund?
Link to comment from December 6, 2025
I'm both a minimalist and a cheapskate so here's where I've ended up: Fidelity as our primary brokerage AND bank, Schwab as a back-up. Why? Fidelity is the only one of the three major brokerages that has a lockdown feature to prevent fraudulent ACATS transfers, plus (unlike Schwab) they pay competitive (with high-yield savings accounts) interest on sweep funds in money market accounts. They also offer a Visa credit card whose cash-back feature nets us several hundred dollars a year since we charge everything we can on it and pay it off monthly, along with a debit card that reimburses transaction fees worldwide. Good luck finding a bank that offers these benefits. Given the omnipresent threat of cyber attacks temporarily impeding account access I think it's prudent to have at least one backup brokerage. Schwab fulfills that role for us nicely. By intention and design their yields on both bank savings and checking accounts and sweep money market accounts on the brokerage side are pitiful, so we keep a bare minimum in savings and checking there (which gives us a second debit card to use which like Fido's reimburses us for ATM fees worldwide) and remaining cash in SGOV. Finally, on the investing side, we hold almost exclusively Vanguard ETFs at both brokerages, thereby taking advantage of the one thing Vanguard does well (running low-cost funds) while sidestepping their lousy customer service, primitive website and tools and so-so security. IMHO two great brokerages make regular banks and credit unions superfluous.
Post: Where to Keep Cash
Link to comment from December 6, 2025
Thanks for this! The link to the NYT article appears to be broken in your post so here it is as a gift article in hopes at least a few non-subscribers can read it. https://www.nytimes.com/2025/11/07/opinion/donald-trump-great-gatsby-roating-20s-sec.html?unlocked_article_code=1.zk8.PHMi.y57GHvU02KcT&smid=url-share
Post: AI Rally Market Risks
Link to comment from November 8, 2025
Responding to R Quinn's numerous uninformed comments, here's an up-to-date ranking of world health care systems. The U.S. doesn't fare all that badly (except for being in a league of its own for inefficiency and high costs) but it should be obvious that it is in no way an appropriate thing to be crowing about. What it comes down to is that civilized countries view health care as a right - just as they do transportation infrastructure, clean air and water and so on. What we have instead is what the French call "capitalisme sauvage" - unbridled prioritization of money making hand over fist by a few at the expense of the common good. https://www.usnews.com/news/best-countries/rankings/well-developed-public-health-system
Post: About those US medical costs….
Link to comment from November 1, 2025
Thanks for the timely reminder! One useful rule of thumb I learned from an advisor many years ago is to imagine that your equity allocation suddenly loses 50% of its value and doesn't recover for a decade. If you could still live well under that quite realistic worst-case scenario then your stock percentage is reasonable. Also of note is that both Vanguard and Morningstar are currently recommending 30-40% in equities and the rest in bonds along with a slice of cash for short-term needs as the risk:reward "sweet spot" starting point - essentially turning the classic 60:40 on its head. This is because bonds are (finally) offering a decent real (above inflation) return, while, as you point out, stocks are very richly valued. In that regard though, it's only the U.S. market, in which the Magnificent 7 have a total market share of 40%, that's overvalued. Jonathan Clements' advice to own the TOTAL market - including international equities at global market cap (currently around 35%) has never seemed wiser. Thanks as always Mr. Grossman for your excellent writing.
Post: Is The Stock Market Overvalued?
Link to comment from October 18, 2025
Great article that I hope will be widely-read. Thank you for writing it! Berkshire Hathaway's legendary Charlie Munger's take on Bitcoin sums things up nicely - and memorably: "I think it's rat poison," he famously said in 2013, when Bitcoin was worth $150. When asked to revisit his comments five years later, when the world's largest cryptocurrency was trading at $9,000, he said, "So it's more expensive rat poison." When pressed on the returns some Bitcoin investors were able to make, he called them "idiot booms" that harm the U.S. "In my life, I try and avoid things that are stupid, and evil, and maybe look bad in comparison with somebody else," he said in 2018. "Bitcoin does all three." "It's stupid because it's very likely to go to zero; it's evil because it undermines the Federal Reserve system... and third, it makes us look foolish compared to the communist leader in China," he explained. "[Xi Jinping] was smart enough to ban Bitcoin in China... we are a lot dumber."
Post: Up Because It’s Up
Link to comment from May 31, 2025