IF THE NAME LIZ TRUSS sounds vaguely familiar, there’s a reason: Truss was once the prime minister of the U.K.—but for just 45 days.
How did Truss lose public confidence so quickly? The bond market forced her out. Shortly after taking office in the fall of 2022, Truss proposed substantial tax cuts for both corporations and individuals. That would have been a popular move, except that her budget didn’t include any offsetting spending cuts.

Make no mistake: Stocks are expensive, with the companies in the S&P 500-index currently at 28 times trailing 12-month reported earnings, offering a dividend yield of just 1.3% and sporting a Shiller price-earnings ratio of 37. All three metrics suggest stocks are pricey by historical standards.
Meanwhile, with far less risk, investors can collect 4.5% in annual interest with 10-year Treasury notes and an inflation-adjusted 2.1% with 10-year inflation-indexed Treasurys. Alternatively, for those who favor cash investments,

Hypothetically, say you lost your nerve and pulled you money out of the market because you thought it was obvious the entire economy was ready to collapse due to incredibly high valuations for both stocks and real estate and finally implementing tariffs, only to witness the market quickly recover. How would you get back in?
I suppose this person (not me, of course, since I am a long term index investor) would be best served using a dollar cost average,

https://obliviousinvestor.com/the-value-of-a-second-opinion/

It’s been a topsy-turvy year in the financial markets. Has that prompted you to make any changes to your portfolio’s asset allocation? I’m thinking about four key dimensions:

Stocks vs. bonds vs. cash investments
U.S. stocks vs. foreign shares
Large-cap vs. small-cap stocks
Growth vs. value stocks

If you’ve tweaked your asset allocation, I’d love to know what changes you’ve made—and why.

FRENCH HISTORIAN Alexis de Tocqueville toured the U.S. in the 1830s and chronicled his observations in a book titled Democracy in America. What mainly impressed him was Americans’ focus on trade and commerce.
They have a “purely practical” mindset, he wrote, and concluded that “the position of the American is quite exceptional.” In the years since, others have picked up on this concept of “American exceptionalism.”
Despite recent political and economic crosscurrents,

IT’S BEEN AN UNUSUAL year—to say the least—for investment markets. After rising earlier in the year, U.S. stocks and bonds have dropped in recent weeks. Market leaders like Apple and Nvidia have been among the hardest hit. The U.S. dollar has also dropped, helping boost the value of international shares, and gold has continued to hit new all-time highs, despite inflation cooling.
What can we learn from all this? I see seven lessons.
1.

I’ve mentioned my dumb luck at having most of our money in cash, earning about 4% as of 4/1. My strategy is to dollar cost average back into the market between now and the end of the year. If you ask my reasoning on this, I’d just say that I don’t want to be late to the party that follows the end of trade war. I have begun the process with my IRA, and will soon start on Chris’s.

From looking at the forum posts, Most HD readers are calm and it seems not worried about the markets.  I really don’t believe that because what has happened in the last week and a half has been unprecedented and there is no end in sight.
Without injecting politics into the discussion how are we HD readers going to handle the next 45 months of this turmoil that is caused by the whims of one man who doesn’t understand economics and no one else in his cabinet no matter how bright and successful somehow agreed to be a yes man.

I posted this as a follow-up question in another thread, but it more appropriately should be a separate thread, so here goes:
One reason often cited for not trying to time the market when it comes to stocks is that a large chunk of their gains comes during a small number of days. So if you’re on the sidelines then, you really miss out.
Is there a similar phenomenon with bond ETFs and funds? That is,

I recently sold some bond ETFs to harvest the capital losses. I want to re-deploy the proceeds into fixed income as my stock allocation is where I want it to be.
I subscribe to Jonathan’s and Adam’s philosophy of taking risk with my stocks, not bonds. I was initially inclined to reinvest in Treasury ETFs, around 75% short term and 25% intermediate term. But with the turmoil reaching even Treasuries over the last couple of days,

Have HD readers lost their faith in the bond market after the last few days of declines in bonds?

I would appreciate it if one or more of the smart people on this blog can explain the following : what causes individual stocks prices to change – be it higher or lower ? For every seller there has to be a buyer, so what exactly is causing a stock price to move up or down? What determines how much that movement will be ? Is there a mechanism that continuously, and at millisecond or nanosecond intervals,

I have written in the past about how I approached the COVID market decline. My plan was to increase my equity position gradually as the market declined, first at correction (down 10%), then bear (down 20%), then every 5% decline thereafter. This way I didn’t have to determine when the market reached the bottom, just be methodical in my approach. I then sold shares as the market recovered and made a decent profit from my efforts.

I spend a lot of my free time reading, especially newspapers, which may seem odd to you given the dramatic drop in newspaper subscriptions over the years. I subscribe to three digital newspapers, and their breaking news alerts—which find their way into my email account—keep me busy.
Lately, I’ve been bombarded with news about tariffs and the recent stock market decline. I have no idea how long this economic turmoil will last, and from what I’ve read,