More like America has already been sold
this post was submitted on 12 Apr 2025
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Not buying US for a while. 60% exposure is already too much.
Buying European until my portfolio is 30% European. Then I will buy global index funds again, preferably a mix that excludes the US. Don't want more than 20-30% in US stocks. The political risk is too high in my opinion
As someone who is both new to trading and who has only had exposure to US index funds. What are some European funds you recommend?
VGK is a FTSE ETF that I’ve held since the Russian invasion of Ukraine. It has done well even with the recent drop.
VYMI is a European dividend fund that is fairly stable and generates dividend revenue. However you won’t see huge valuation swings.
Just keep in mind Europe doesn’t have a good track record of growth in newer high tech industry. Since 2000 the US and China have outperformed it. However past results don’t indicate future performance… but if Europe doesn’t enact major economic reforms, I wouldn’t put much faith in it.
This is not financial advice, I am a regular guy, not a professional or someone working with finance. Not licensed etc. If you lose everything by following anything I mention, it's your responsibility.
I only buy passive and not actively managed funds. This is to keep the costs low. A passive fund costs anywhere from 0.1 to 0.3% each year. This is important, because that cost has to be paid every year of the total sum no matter the performance of the fund (in most cases). So low costs is important.
I usually buy a cheap index that tracks MSCI ACWI which is All Countries World Index.
By tracking it means that it buys and sells stocks to keep the holdings the same as that referance index.
MSCI ACWI is very popular as it tracks the entire world more or less. Including emerging markets.
As a Norwegian there is "Storebrand Alle Markeder" which I buy. For MSCI ACWI
But for Europe there is MSCI Europe Index, where I buy DNB Europe Indeks which tracks that.
So first check your current banks offerings, search for Europe and see what reference index they follow. Check other banks as well and see if they have lower costs for the same reference index.
I just want to mention an additional point just in case you are not aware. You should never time the market or try to be smart. There are exceptionally talented and intelligent people with the best tools in the world that you are trying to beat. You will lose sooner or later, but you might be lucky a few times. I recommend that you read about "The efficient market hypothesis". I base all my investments on that principle.
Make sure you use tax efficient accounts if there is something like that in your country. So that you can sell and buy stocks without triggering taxes. So that the only time you have to pay taxes is when you take it out of the account.
Also, diversification is important. So make sure to diversify properly. That's why I buy ACWI most of the time. Also make sure you have a long term view on your investments. You should be able to let the money stay in the market for an absolute minimum of 5 years
I am just a regular guy, and not an expert and not a trader or licensed or anything. I just put my savings in the stock market every month. So take everything with a large scoop of salt. This is not financial advice.
Can confirm.
I'm not selling but my future investments will be far more global. You're no longer diversified if the bulk of your investments are based in the US.
"This suggests foreigners have been and are continuing to sell U.S. stocks and sending their money elsewhere,"
I just know we did, and frankly I don't understand those that don't?
where is some decent spots as an american, there is nothing more scary than having that convicted rapist and serial biz failure to want my money anywhere he can influence it
I'd say EU is the best spot. But I may be biased. But IMO EU stands for reliability economically, and in political direction, and in respect for its citizens and in international relations.
With China we have seen the system can make harmful interference as we saw with Jack Ma. So for me China is not an option either. It's actually worse than USA, although not by much.
but what is even the method, if the us currency is cooked what make world work then?
The USD is the most used reserve currency, that will probably remain the case for a while yet, but it will probably decrease, and other currencies will be used more.
That's not a problem for the world, only for USA. As it will make it necessary to print less money, and/or increase interest rates to stave off inflation. This will of course make USA a bit poorer than it would have been otherwise.
How dramatic the effect will be obviously depends on the speed this will happen at. I think it will be slow, so not very dramatic.
But I don't think Trump understands the privilege it has been for USA to have the world leading reserve currency.
just the turmoil from moving from one to the other. Then lets say EU takes off, but they get psy-oped to FAFO also. Where does it end when in this current climate that there is no centralized barometer of value?
The USD is the most used reserve currency [...] but it will probably decrease, and other currencies will be used more.
That's not a problem for the world, only for USA.
Uhh yeah, that's absolutely a problem for the world. You literally just said USD is the most used reserve currency (also, the basis for the petrodollar at the moment). Of course changing that is going to affect "the world".
I never claimed it wouldn't affect the world, only that it wouldn't be a problem, it just means selling off USD to buy other currencies to trade with instead, that is obviously not a problem. Only USA will be affected negatively by their currency being sold and losing value. If this happens fast the USD will plummet. And that will probably mean vastly increased interest rates and inflation in USA.
You're naive if you don't think other nations will suffer when the USD fails. We're in a global economy, and our currency is basically considered the world's reserve currency. That means that other nations have USD. What do you think happens when the dollar fails?
Are those nations somehow indemnified against losses in some way I'm not aware of?
Nah we are just selling off USD we don't need anyway, in exchange for other currencies that have better value to us.
The USD has already dropped 10% to the Euro since Trump became president. That's the lowest since 2021!
We are in a worldwide, interconnected economy. You cannot crash "the world's reserve currency"/Petrodollar without creating some massive ripples (or more like tidal waves) throughout the world economy.
Maybe not, but when the dollar declines, everything else is up relatively. so the losses on dollars are recouped in increase in native and other currencies for those countries.
Unstable markets are generally unhealthy for everybody, but obviously a declining US economy is worst for USA.
Trump actually want the dollar to decline, he thinks USA can export more and import less, and he is getting what he asks for. But it will mostly be import less, and not so much export more.
The US trade war (tariffs) are way more serious than the declining dollar.
Everybody else is already increasing activities around USA.
If the dollar remains stable it doesn't make a hoot of a difference to change our reserve currency to something else for anybody else but USA.
For Europe to change it to Euro would be HUGELY beneficial. For everybody else it doesn't matter.
If Saudi Arabia sell oil for Euro instead of USD to Europe that's a HUGE advantage for Europe.
If they sell to other countries for Euro instead of USD, it makes no difference for either party.
But USA will in both cases have to buy their own dollars back, and that will make the dollar fall.
Do we (the rest of the "free" world) want this? No!
Did we ask for this? No!
Did we cause this? No!
Did USA cause this? Yes.
I am so glad I bought so much foreign currency in January.