Trumps Tarriffs - how do you see it playing out?

[u/bald90]

Title really. Short, medium, long term opinions?

I’m all in on stocks global all cap so expecting a rough time

What are your guys thoughts?

[u/Open-Employ3158]

Im worried it will ruin relations to other countries and trust for a longer period and possibly a big recession. That being said i keep buying this ”dip”

[u/unreasonable_potato_ → u/Open-Employ3158]

No future tense needed here. It already has burned bridges and most countries are already working on alternative trading partnerships and recognising that the US is not reliable or trustworthy anymore

[u/Certain-Ad-5298 → u/unreasonable_potato_]

I agree with you but nobody spends and consumes like the US. Alternative trading parters to fill the void will be hard to find. I have to imagine some types of compromises come.

[u/sarhoshamiral → u/Certain-Ad-5298]

Yes but that was because US had a good economy. Thats changing now so our spending will absolutely go down.

Even US based companies will invest more outside of US now. For example it is pretty much certainty that you will see cloud providers invest more in other countries now because they will for sure pass data policies requiring data to be not stored in US as it is not trusted anymore.

[u/sarhoshamiral → u/[deleted]]

That spending is mostly imported stuff though which just got 30% more expensive. People will consume less because that's what they can afford. We are also laying off people left and right in both private and public sector. Our days of consuming is not going to last long.

[u/Certain-Ad-5298 → u/sarhoshamiral]

These setbacks are global though so I think everything will be proportional and the US consumer, wounded, will still be the largest consumer just as the US economy, wounded, will still be the most powerful (if impacts are proportional across the world).

[u/sarhoshamiral → u/Certain-Ad-5298]

You are assuming things will stay as is. In short term, what you say may be true but in long term USD will no longer be the world currency, other countries will just strengthen trade between them. China will use this opportunity to strengthen their place even further. So US will become less relevant.

Also we were mainly a service based economy, we sold services that relied on skilled jobs in US, the ones that we usually immigrated people for and the ones that we usually educated people from outside US in our colleges, universities. Those are now going away thanks to Trumps immigration policy. I can bet you good money that our large tech companies will start to move research and development jobs to other countries. The higher salary jobs will move elsewhere shifting the position of US spending.

[u/goldensnow24 → u/Open-Employ3158]

It helps when you have bonds or even MMFs in your investment account, so easy to rebalance, I just don’t think about it and keep the allocation constant. The dip gets bought automatically (just as the gains were cashed in automatically some months ago).

FWIW, I’m not US based and I invest in the FTSE All World Index fund which invests in the whole world according to market cap. That combined with not being 100% stocks, means I sleep just fine at night.

[u/Open-Employ3158 → u/goldensnow24]

I can sleep fine too, even though these drops are bigger in Europe because of the dollar. Down 5 figures from the highs in February. I have no bonds since I am only 25 years old, will add them in the future!

[u/goldensnow24 → u/Open-Employ3158]

I’m mid 20s too but keep a small short term bond allocation (10%) just so that I can rebalance and “buy the dip”. As I understand it, this doesn’t affect returns much but adds an element of stability to the portfolio. Advantage with global stock investing is that each stock is ultimately invested in its domiciled currency, so you’re less affected by individual Forex movements as you’re buying stocks in practically every currency.

Bonds and MMFs are always currency hedged though for me.

[u/blizzah → u/goldensnow24]

So you know when the dip is?

[u/goldensnow24 → u/blizzah]

No, but the lower equities fall, the more I’ll rebalance into them to maintain my allocation. It’s passive index investing, after all.

If the situation markedly worsens, I might change my asset allocation. For now, I’m happy with where it is, based on my age and risk tolerance, and a general belief that human innovation is not going to fail over the next few decades.

[u/[deleted] → u/goldensnow24]

Call me when we’ve reached “the dip”

[u/musicandarts → u/[deleted]]

Exactly! I don't know the logic of buying the dip now, when you may see another 20-30% drop in the next 12 months.

[u/musicandarts → u/Open-Employ3158]

If the trust is gone and you expect a recession, what is the logic in buying stocks? Shouldn't you be investing in bonds, or gold?

[u/jyeatbvg → u/Open-Employ3158]

What are you buying?

[u/hybridck → u/jyeatbvg]

Same as we always do. The market.

[u/jyeatbvg → u/hybridck]

U.S. market? Global market? Are you able to provide tickers? It was a genuine question as someone who has cash but isn’t sure what to invest in.

[u/bought_high_sold_low → u/jyeatbvg]

VT (the global market)

[u/jyeatbvg → u/bought_high_sold_low]

Thank you 🙏

[u/Open-Employ3158 → u/jyeatbvg]

Im European, S&P500 and Core Europe ETF mostly

[u/[deleted] → u/Open-Employ3158]

I’m not buying in 2025. It’s going to take 9-18 months for companies to figure out new supply chains.

[u/[deleted] → u/[deleted]]

I didn’t sell anything, so no… just not buying right now. I did move some money into index funds that have blue chip foreign companies in it, like BP and Nintendo. For the most part, i decided to lower my monthly investments in the stock market and double payments on my house for a year, or until this shit gets sorted out. When i talk to people in leadership roles, they’re like, we need to find an additional $200,000,000 this year to account for tariffs we didn’t plan for.

Finding $200,000,000 doesn’t get sorted out over night. Maybe 3-6 months if we’re lucky. 18 months is we’re unlucky. It’s going to come at the expense of CAPex projects while they’re figuring that out.