In follow up on my earlier post, I have been looking for comments and insight regarding the current investment environment. Finally Barron’s has posted something. (As I posted earlier, I made a shift to international markets and a small position in gold after polls indicated there would be a change in administration last September.) From Barron’s: How Fund Managers Are Grappling With ‘Autocracy Risk’https://www.barrons.com/articles/fund-managers-grapple-autocracy-risk-846a0621?st=Zpze4K
After the polls suggested in late September that Trump would likely win the election I purchased a 5% position in a gold ETF. I also invested in Berkshire Hathaway with their large cash position and US holdings. My concern is/was what effect a change in the rule of law would have on the stock and bond markets. So far the portfolio is ahead of the US total stock market about 10% (down from 20% prior to the recent market improvement). The question is whether to take the profit on the gold or to keep it as insurance against further market turmoil after seeing the effects of the tariffs as they kick in later in the year (or years) ahead.
Also gold may have a longer term value as Barron’s 7-15-2024 noted:
Abolish the Federal Reserve? Here’s What Conservatives’ Project 2025 Would Do.
The conservative Heritage Foundation think tank's so-called Project 2025's primary recommendations for the Fed include a unitary focus on controlling inflation, winding down its balance sheet, and ending its lender-of-last-resort function. Further proposals would return the U.S. to a gold standard or abolish the Fed entirely.
I have similar concerns about defaulting on bond commitments or manipulation of COLAs on TIPS or repression of interest rates on treasuries if not outright defaulting.
Like you, my wife and I are in our early 70s. We ordered a new car and negotiated the price a month ago and are awaiting delivery. I also decided to purchase a new camera and lens set in anticipation of tariffs.
We also have a diversified portfolio with largely equity index funds in taxable account and TIPS in an IRA equivalent account. When the polls indicated a change in administration last September I did fund a 5% position in a gold ETF. When/If there is a 20%+ drop in the market I will consider moving that back into the market.
I hope that the “old-fashioned approach” to the market as you say prevails, but feel as uncomfortable now as I felt in 2009. Little has been mentioned in the financial press until recently about potential government manipulation of COLAs for TIPS or repression of interest rates on treasuries. Only the standard dogma “stay the course.” Having cash and some gold might be a good feeling.
We have a “Growth with Income“ portfolio per Fidelity with enough cash and TIPS to last to age 95+ if no government manipulation of COLA or repression of rates or interest payments. (That is a concern although see no good alternative.). After polls in September indicated a change in presidential leadership I added a 5% position in a gold ETF. I will consider moving that position into the market if a 20% drop in the market depending on global stability.
Naturally health would be near the top of anyone’s list of concerns with the risk of dementia with aging. While perhaps partially covered by concern of the “state of the world.” What I am surprised is the relative lack of concern regarding fundamental changes in laws related to investment products and the importance to our investments of maintaining the rule of law.
The WSJ has had articles about the potential for interest rate “repression” for example as a way to reduce federal budget expense. Today the WSJ reports “Uncertainty has dented the municipal-bond market after a move to strip munis of their tax-exempt status was proposed by the House Budget Committee.” Should owners of TIPS be concerned that the CPI be manipulated as another means to reduce the federal budget?
I have been amazed with the standard dogma advising investors not to make changes in their investments last year anticipating the change in administration. For example, a position in gold was a reasonable investment when polls in late September showed a new administration.
Excellent work! Major points include “because the technology companies that dominate the domestic market are far larger and far more profitable than their international peers.” and factors related to economic growth in foreign countries and productivity. Whether it should or not, I feel better now with having only 20% of stock in foreign markets.
There is an argument for market timing….just not short term market timing perhaps: Yes, You Can Time the Market!Ben Stein, Phil DeMuth Wiley, May 13, 2003 - Business & Economics - 208 pages
Economist, actor, author, and former quiz show host Ben Stein teamed up with investment psychologist Phil DeMuth to examine a century of stock market data and discovered a profound and original investment truth: Yes, you can time the market! In their instant investment classic Yes, You Can Time the Market!, Stein and DeMuth show investors simple, readily available measurements that tell them when it's time to invest in stocks, bonds, real estate, or cash. Written for the investor who wants to preserve capital and build wealth steadily, this book offers prudent, bedrock advice for anyone who can no longer afford to play games with their money.
Excellent article and start to stimulating discussion below. My wife and I started on a medicare advantage plan through Wisconsin Retirement Services when I retired and moved out of state to be near our daughter. I was able to apply my accumulated sick leave to cover the premium for approximately the first year. In the 5 years with UnitedHealthcare (ppo plan, not hmo plan) we have had only one physician group not accepting the coverage. (We have always asked before making an appointment). Medicare Advantage plans are noted for paying physicians and hospitals less than standard Medicare and this summer we were notified by both our regional hospital and primary care physician that they would no longer accept our coverage. (They both subsequently negotiated with UHC and are currently accepting again). We are currently in the process of moving to Medigap coverage and fortunately in good health so hoping the medical underwriting will not be too much of a problem.
We have been frequently contacted by UHC to have home visits but decline since we see our physician regularly. A recent WSJ article was posted about MA home visits: https://www.wsj.com/health/healthcare/medicare-insurers-extra-payments-72d09393
Comments
In follow up on my earlier post, I have been looking for comments and insight regarding the current investment environment. Finally Barron’s has posted something. (As I posted earlier, I made a shift to international markets and a small position in gold after polls indicated there would be a change in administration last September.) From Barron’s: How Fund Managers Are Grappling With ‘Autocracy Risk’ https://www.barrons.com/articles/fund-managers-grapple-autocracy-risk-846a0621?st=Zpze4K
Post: Ch-Ch-Changes?
Link to comment from May 14, 2025
After the polls suggested in late September that Trump would likely win the election I purchased a 5% position in a gold ETF. I also invested in Berkshire Hathaway with their large cash position and US holdings. My concern is/was what effect a change in the rule of law would have on the stock and bond markets. So far the portfolio is ahead of the US total stock market about 10% (down from 20% prior to the recent market improvement). The question is whether to take the profit on the gold or to keep it as insurance against further market turmoil after seeing the effects of the tariffs as they kick in later in the year (or years) ahead. Also gold may have a longer term value as Barron’s 7-15-2024 noted: Abolish the Federal Reserve? Here’s What Conservatives’ Project 2025 Would Do. The conservative Heritage Foundation think tank's so-called Project 2025's primary recommendations for the Fed include a unitary focus on controlling inflation, winding down its balance sheet, and ending its lender-of-last-resort function. Further proposals would return the U.S. to a gold standard or abolish the Fed entirely.
Post: Ch-Ch-Changes?
Link to comment from May 10, 2025
I have similar concerns about defaulting on bond commitments or manipulation of COLAs on TIPS or repression of interest rates on treasuries if not outright defaulting.
Post: Tariffs and our retirement assets
Link to comment from April 5, 2025
Like you, my wife and I are in our early 70s. We ordered a new car and negotiated the price a month ago and are awaiting delivery. I also decided to purchase a new camera and lens set in anticipation of tariffs. We also have a diversified portfolio with largely equity index funds in taxable account and TIPS in an IRA equivalent account. When the polls indicated a change in administration last September I did fund a 5% position in a gold ETF. When/If there is a 20%+ drop in the market I will consider moving that back into the market. I hope that the “old-fashioned approach” to the market as you say prevails, but feel as uncomfortable now as I felt in 2009. Little has been mentioned in the financial press until recently about potential government manipulation of COLAs for TIPS or repression of interest rates on treasuries. Only the standard dogma “stay the course.” Having cash and some gold might be a good feeling.
Post: Finding Your Balance by Dennis Friedman
Link to comment from April 5, 2025
We have a “Growth with Income“ portfolio per Fidelity with enough cash and TIPS to last to age 95+ if no government manipulation of COLA or repression of rates or interest payments. (That is a concern although see no good alternative.). After polls in September indicated a change in presidential leadership I added a 5% position in a gold ETF. I will consider moving that position into the market if a 20% drop in the market depending on global stability.
Post: Tariffs and our retirement assets
Link to comment from April 5, 2025
Post: How’s Your Crystal Ball? By Jonathan Clements
Link to comment from April 5, 2025
Naturally health would be near the top of anyone’s list of concerns with the risk of dementia with aging. While perhaps partially covered by concern of the “state of the world.” What I am surprised is the relative lack of concern regarding fundamental changes in laws related to investment products and the importance to our investments of maintaining the rule of law. The WSJ has had articles about the potential for interest rate “repression” for example as a way to reduce federal budget expense. Today the WSJ reports “Uncertainty has dented the municipal-bond market after a move to strip munis of their tax-exempt status was proposed by the House Budget Committee.” Should owners of TIPS be concerned that the CPI be manipulated as another means to reduce the federal budget? I have been amazed with the standard dogma advising investors not to make changes in their investments last year anticipating the change in administration. For example, a position in gold was a reasonable investment when polls in late September showed a new administration.
Post: What Worries You? By Jonathan Clements
Link to comment from March 21, 2025
Excellent work! Major points include “because the technology companies that dominate the domestic market are far larger and far more profitable than their international peers.” and factors related to economic growth in foreign countries and productivity. Whether it should or not, I feel better now with having only 20% of stock in foreign markets.
Post: Look Both Ways
Link to comment from January 12, 2025
There is an argument for market timing….just not short term market timing perhaps:
Yes, You Can Time the Market!Ben Stein, Phil DeMuth Wiley, May 13, 2003 - Business & Economics - 208 pages Economist, actor, author, and former quiz show host Ben Stein teamed up with investment psychologist Phil DeMuth to examine a century of stock market data and discovered a profound and original investment truth: Yes, you can time the market! In their instant investment classic Yes, You Can Time the Market!, Stein and DeMuth show investors simple, readily available measurements that tell them when it's time to invest in stocks, bonds, real estate, or cash. Written for the investor who wants to preserve capital and build wealth steadily, this book offers prudent, bedrock advice for anyone who can no longer afford to play games with their money.
Post: Misleading Indicators
Link to comment from November 30, 2024
Excellent article and start to stimulating discussion below. My wife and I started on a medicare advantage plan through Wisconsin Retirement Services when I retired and moved out of state to be near our daughter. I was able to apply my accumulated sick leave to cover the premium for approximately the first year. In the 5 years with UnitedHealthcare (ppo plan, not hmo plan) we have had only one physician group not accepting the coverage. (We have always asked before making an appointment). Medicare Advantage plans are noted for paying physicians and hospitals less than standard Medicare and this summer we were notified by both our regional hospital and primary care physician that they would no longer accept our coverage. (They both subsequently negotiated with UHC and are currently accepting again). We are currently in the process of moving to Medigap coverage and fortunately in good health so hoping the medical underwriting will not be too much of a problem. We have been frequently contacted by UHC to have home visits but decline since we see our physician regularly. A recent WSJ article was posted about MA home visits: https://www.wsj.com/health/healthcare/medicare-insurers-extra-payments-72d09393
Post: Prefer the Original
Link to comment from October 26, 2024