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Why Trump stinks, what it means for your finances and how you can still keep investing!

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Tariffs, protectionism and an America First mentality that does more harm than good. But what does this have to do with your finances? Quite a lot. Trump's economic policy is a good example of why you shouldn't just rely on the USA as an investment location and why ego in politics can cost you your investment returns in the long term.


Tariffs: expensive, pointless, harmful

One of Trump's favorite tools was (and is) the tariff stick. Whether against China, Europe or Mexico. Trump believes that higher tariffs will protect American jobs and strengthen the domestic economy. In reality, however, these measures have had one main effect: rising prices for consumers, growing uncertainty for companies, the stock market and declining competitiveness.


Example: The punitive tariffs on Chinese products have forced many US companies to either accept higher purchase prices or make expensive changes to their supply chains. Consumers and investors ultimately pay the price when company profits come under pressure.


His ego: above all else

Trump's actions are not economically rational, but impulsive and egocentric. Decisions are often made on instinct or, worse still, to nurture his own ego. Economic logic or long-term planning? Probably not the case.


The problem: the markets don't like uncertainty. If one man introduces tariffs, terminates contracts or strains trade relations out of spite or a desire to make a name for himself, this becomes a political risk, one that can have a direct impact on your portfolio.


Conclusion: Why you shouldn't just bet on the USA

Although the USA is an important business location with many innovative companies, it is not the world. Anyone who invests their money exclusively in US equities or in a pure S&P 500 ETF is taking a cluster risk, both politically and economically. Trump's time in office has impressively demonstrated how quickly an environment that is considered safe can turn into a highly dangerous playground for political arbitrariness.


My tip: World ETF, Bitcoin and/or gold instead of ego roulette and cluster risk

In the long term, you are best off with a globally diversified ETFfor example on the MSCI World $IWDC (+0,15%) or FTSE All-World $VWRL (-0,09%)
$FWRG (-0,11%) . This spreads your risk across many countries and sectors and makes you less dependent on whether a single president is in a good or bad mood. If you want other assets, I recommend a manageable share of Bitcoin $BTC (+0,12%) and/or gold $ZGLD!


Trump shows how irrational politics can be. Your investment should be exactly the opposite: rational, broadly diversified and long-term oriented.


Bottom line: Trump stinks - economically speaking (perhaps literally). His tariffs do more harm than good and his ego is a ticking time bomb for the markets. If you invest wisely, you won't be rattled by this, but will focus on the whole world instead of a single political uncertainty factor.


What is your opinion on this? What do you do with your portfolio in times like these?


Your Lord Vader!


#etfs
#crypto
#gold
#trump
#langfristig
#finanzen
#politik

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28 Commenti

immagine del profilo
My portfolio consists of the 3 positions you mentioned: FTSE All-World ETF, Gold & Bitcoin. That's it. Here's to the next decades. 🥂
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immagine del profilo
@femkelbn Strong! I think we are certainly doing well in terms of average returns for the future!
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immagine del profilo
@femkelbnEven though my portfolio looks different, I think your approach is great.
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immagine del profilo
@SCHLiCHTE_capital everyone goes their own way of power!
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immagine del profilo
@TheRealDarthVader...this is the way
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immagine del profilo
@femkelbn I find your portfolio inspiringly simple and well positioned - top!
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immagine del profilo
@Roccola601 Thank you very much! ☺️
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immagine del profilo
Simple and beautiful 👏🏻
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Follow Warren, Charlie and Peter. Buy quality at a discount and hold on to it forever. It's very simple.
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immagine del profilo
@user28461 Do you have $BRK.B in your portfolio or do you put together your own stocks?
@TheRealDarthVader Do it yourself, I meant rather to follow the mindset of the three, they are all no longer (properly) in service, so to speak.
immagine del profilo
@user28461 Understandable. Good luck then!
immagine del profilo
I invested CHF 1,800 in $MSFT on April 7 and CHF 2,400 in $VWRL on April 9 because I think diversification is also important. I put all my savings into the market because the stock market had collapsed so much. But I was really lucky that I invested right at the lowest point😅 My allocation is 25% in $VWRL and 75% in individual stocks😃
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immagine del profilo
I don't like gold
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immagine del profilo
@TheRealWood Digital gold or classic gold? ;) and why?
immagine del profilo
@TheRealDarthVader
Unlike shares, bonds and real estate, gold does not generate cash flow and therefore has no theoretically determinable fundamental present value. In the case of a normal, cash flow-producing asset, this fundamental value can be determined using discounted cash flow analysis, for example - this is not possible with gold. Key figures that are routinely used for shares, bonds and real estate to roughly assess whether the asset class is overvalued or undervalued do not exist for gold.

In addition, gold has no significant industrial use, as is the case with all other commodities. On a long-term average, around two thirds of annual gold production flows into the jewelry industry. Whether this counts as industrial use is questionable - because in China and India, the most important consumer countries in this respect, gold jewelry is not only seen as an aesthetic ornament, but also as an investment.
All in all, gold is the only asset class for which all the usual valuation methods used in financial economics already fail conceptually. The Dutch economist Willem Buiter puts this valuation dilemma in a nutshell:
"Gold has value if and only if enough people believe that it has value."
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immagine del profilo
@TheRealWood Thanks for the answer. I understand your reasoning but gold has had a value that people believe in for so long why shouldn't it be so in the future? Also, all major industrialized countries have huge gold holdings and not just on a whim, but because they also believe in the value of gold and it is one of the only assets that runs against the stock market and serves as a crisis hedge in the portfolio.
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immagine del profilo
Ridiculous. I don't mean that as badly as it sounds, but your world ETF as well as gold and Bitcoin are massively dependent on the US. Then you might as well just leave it alone and go straight into US investments. Or get advice from your savings bank, I've heard there are really good Riester pensions without any US dependency 🤗
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immagine del profilo
@Soprano I think you misunderstand the article. It's not about not having any US shares. Of course I want the returns from Nvidia and co. but not just America. If America loses economic power, a world etf will automatically rebalance and have fewer American shares in the etf. I think you could do with some advice ;)
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@Soprano Since when has gold been USA-heavy? That would be news to me.
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immagine del profilo
Since I tend to trade rather than invest for the long term in order to achieve my goal with around 50-60% of my portfolio, I am happy about the higher vola in both directions. So I don't have any of your 3 investments in my portfolio to any significant extent.
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immagine del profilo
@Multibagger Sure, if you manage to beat the market for years like Buffet, then you're welcome. Just know that very few traders manage to do this.
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immagine del profilo
@TheRealDarthVader Unlike many others here, I trade for fun at the age of 60, so if I don't make it, at least I've tried. But I am confident that I will definitely beat the 6-8% of a good ETF. Whether I achieve the minimum 45% increase in value required for my goal every year is challenging but not impossible. I think it's important that everyone acts as they feel comfortable. There is no one right way for everyone.
will beat.
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immagine del profilo
@Multibagger I think that sounds quite exciting and of course wish you every success on your journey! Do you also trade cryptos or other assets or are you focusing on shares to achieve this return?
immagine del profilo
@TheRealDarthVader Most of these are derivatives on equities. Long, short, sideways. Sometimes also on foreign exchange and commodities. No cryptos, as I once told myself that I only invest larger sums in things I know something about. I don't know anything about cryptos.
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immagine del profilo
The world ETFs you mentioned contain 60-70% American equities, so they are not sufficiently diversified. Instead, you could look at the STOXX Global Select
Dividend 100 $ISPA, which contains 20% American stocks. Another advantage is that this ETF $ISPA generates a cash flow through the quarterly dividend distribution, which may be tax-free if you are resident in Germany AND have not yet exhausted your tax-free allowance.
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immagine del profilo
@-Juergen- I'll take a look thanks!
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immagine del profilo
The USA has very good economic figures. Trump is doing everything right, prices will be higher at the end of the year than they are now. I don't understand many of the complainers here. Surely it's mainly impatient younger people, or those who have always been on the left... GDP is growing, consumption is stable. It will, it will, it will! (But I also see that 70% in the World ETF is too much, so I'm at 45% USA. But everyone can control that themselves).
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