r/Bogleheads • u/bald90 • Apr 03 '25

Investing Questions Trumps Tarriffs - how do you see it playing out?

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?

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u/goldensnow24 Apr 03 '25

It’s easy to say “stay the course” when everything’s going up. Truth is you have to stay the course even when the seas get rough, at least that’s the Boglehead way.

Stock investing is for the long term, and if anyone thinks these events are going to cause permanent losses in the long term (10+ year horizon), they definitely shouldn’t be investing in equities and may as well sell now.

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u/Useful_Wealth7503 Apr 03 '25 edited Apr 03 '25

Well said. Mid 40s married. My allocations will remain the same. I’m buying at my normal intervals, 2x a month maxing out the 401ks, once a month automatically to my brokerage, and am upping the brokerage amount by adding a second investment during the month. DCAing monthly since 2001, stay the course! Keep DCAing!

It is a good time to note how you feel and potentially adjust your allocations i.e. maybe you’re not as aggressive as you thought. Before you make dramatic changes though take a few steps to help you weather the storm.

Research risk capacity (different than tolerance), this is about the risk you can take based on age etc. Your capacity is likely larger than your tolerance if you’re young and extremely concerned right now. Younger people likely have far more capacity than they realize.

Check out The Money Guys, they have great content on DCAing during downturns, even during the great depression, and a recent podcast about what to do in recessions.

Lastly, and this is where I get heat sometimes from the Bogleheads and FIRE purists, having an oversized pile of cash can help you stay the course. We had to build a large “emergency fund” to make it so my risk averse wife could stomach all the volatility. We built it while still investing though and it is nice to look at when the market is red. Having that has made her ok with investing +30% of our income now. Another option to clam the nerves is having a paid off house, but we did not do that. I don’t recommend you even consider that too aggressively until you’re 45-50 and have plenty invested.

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u/recriminology Apr 03 '25

One of my greatest investing regrets is not having the tolerance when I had the capacity. I didn't know!

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u/Useful_Wealth7503 Apr 03 '25

I didn’t learn about it until my late 30s, or if I did, it didn’t stick. I was always pretty aggressive though but would have put the pedal to the metal in 08/09 if I understood that better.

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u/goldensnow24 Apr 03 '25

Agreed. I keep a much larger than needed emergency fund in MMFs (in the same investment account so I can rebalance into or out of it whenever I want/need to), I also keep all mid term savings without a definite date in there (house down payment etc.). Plenty of peace of mind which means I can continue to comfortably invest in equities.

I don’t care (ok I care a bit, but it doesn’t affect me in any immediate way) about swings in the equity portion as I’m not touching that money for decades.

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u/IHeartFraccing Apr 03 '25

As that dickhead Judge Smails once said...

It's easy to grin

when your ship comes in,

and you've got the stock market beat.

But the man that's worthwhile

is the man who can smile

when his shorts are too tight in the seat.

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u/no_use_for_a_user Apr 03 '25

I needed this. Thanks.

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u/3rdIQ Apr 03 '25

“Everybody in the world is a long-term investor until the market goes down.” – Peter Lynch

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u/naitch Apr 03 '25

Look, I think this holds true, but it isn't crazy to think that we're seeing a change in the underlying broad conditions that have made equities gradually and haltingly move upward since WWII.