As someone looking to retire in less than 10 years, I've kept my investments aggressive. One takeaway from 2008 and the Obama recovery is that all the talk about markets loving predictability is nonsense, just as the myth about corporations loving efficiency is false. When the Bush, Jr. administration deregulated markets and supported a "shadow economy," investments soared, deals multiplied, and stocks went wild. That was perhaps the most unpredictable period in modern history. Then Obama required greater transparency and stress-tests - all of which strengthen predictability. Major corporations whined and cried and while investments grew, they were lackluster for a recovery.
The dealmakers who have the biggest impact on markets love insider trading, unethical reporting, and back-room, illegal mergers. They hate oversight even though oversight helps serve the nation by bolstering long-term stability; they just want to enrich themselves and the national economy be damned. I expect the stock market to pay off well even as Trump destroys our economy because he will never take regulation or oversight seriously. Dealmakers know this and that's the number one factor to watch.
Sorry to sound so cynical, but this approach has paid off well for me so far.
It may have been John Kenneth Galbraith who said something to the effect that there are two kinds of investors: those who think their investments will rise in perpetuity and those who know they won't and think they can get out in time. Both are delusional.
My eclectic investment strategy was to sell periodically when the market hit a new high, then reinvest the same amount each month, buying more cheap shares if the market declined and fewer expensive shares if the market went up (dollar-cost averaging). If you just sell on new highs, you don't lose money, though you may lose some continued appreciation.
Warren Buffett has been getting out of the market for a while, and it's wise to follow his adage: Sell when others are greedy (the market is high) and buy when others are fearful (the market is low).
Catherine, I have some suggestions for stories. Is there a way to contact you privately? My email is stancrock@gmail.com.
I’m a relatively uninformed retiree who has a financial person handling my quite small retirement portfolio. I’ve studied Ms Rampell’s remarkably easy to understand article and read comments made thus far. I need to do additional reading because I must say, I’m frightened. Lately I’ve been feeling it’s a good thing I’m old and won’t have to deal with what I fear our country will face in coming decades.
Great article. I think that if SCOTUS allows the tariffs to continue then the market will sell off but I think they will save the dictator from himself. But, really, this quote from Receipts describes how bubbles end: "Until one day, with no obvious, specific triggering event, markets just imploded." The dot com and housing bubbles could have burst sooner or later than they did. Those who made tons by shorting the housing bubble were correct in their thesis and lucky in their timing. This bubble could have persisted and they would have lost tons. There is no way to know when these things end. Beware the black swan.
My supposition is that corporations are, as usual, mostly focused on the short term and not the long term. I think they fall into the category of either actively supporting the craziness of the Trump regime because they truly don't believe in democracy, for example Peter Thiel/Elon Musk. Or they believe that they are smarter than Trump, (Zuckerberg, Bezos, etc.) and can play to his narcissism and outsmart him in the short term at little cost to them. This group assumes that after the Trump regime is over, everything goes back to "normal" in a pre-Trump world. It's not crazy to play that game from a pure economic argument if you believe this is all short term, reversible damage. But I question that assumption. For example, I think foreign investment into the US will be chilled for some time into the future, resulting in higher cost of capital for the US.
Also, I'm hoping that in 2026 and beyond, we don't forget these corporate leaders and what they did to enable the Trump regime, for their personal and corporate benefit. These are the supposed powerful elites who, in theory, had the power to stand up to Trump, but chose to bow the knee when the country needed them the most.
I'm hoping that they pay a price for their actions, and that first and foremost as a nation, we become focused on crafting policies that will be in the best interests of the average American and reflect the fact that America is done with the billionaire elites.
It will get worse. When Trump takes over the Federal Reserve and starts bragging on Truth Social about "running" interest rates and artificially forcing rates to 0% investors are going to say thats it. That's enough.
Yeah, and the guys who can't do heavy labor will work in nursing homes, right? There are staff shortages in all nursing homes, even the ones that cost a fortune.
1) I doubt that I can comment intelligently on economic issues, but I see several possible reasons for why Trump’s policies haven’t hurt the market more.
a) Maybe the tariffs won’t really have as big of a negative impact as most economists have predicted. I can see that there could be a lot of groupthink going on since just about every economist says that tariffs are bad. And most people (including economists) won’t be willing to abandon their long-held beliefs for a long time.
b) Maybe the markets are betting that Trump will cave if the economy really turns sour. I think that was one reason the tariffs haven’t bit that much so far – businesses didn’t think they would stay at those levels for very long so they were willing to eat the costs for now (and they might feel that Trump will bail them out if need be – unless they happen to be in the green energy business). Or maybe they believe that SCOTUS will rule against Trump.
c) Maybe the economy is simply fundamentally more sound that many economists give it credit and can weather what Trump throws at it.
d) Maybe businesses are already looking at Trump as a lame duck and are figuring that his policies won’t survive past his term in office.
e) Maybe this is such an uncertain time that none of the old measures used to evaluate the economy don’t really hold any more.
But what do I know.
2) I think that investment in AI will continue until it simply can’t anymore. There used to be an old joke (“old” as in 40 years ago) that no one got fired for buying IBM. Well, I doubt that anyone will get fired for investing in AI (for the foreseeable future). If the bubble does burst, there will lots of examples of others that business leaders can point to to ameliorate their bad decisions.
An interesting thing to look at is the market against other currencies. If you put the s&p against the euro, it functionally hasn't moved because of how much the USD has dropped. The only reason no one seems to care is because of the reserve currency status, and if the world wakes the fuck up and realises letting that continue is a bad idea, the US is fucked.
What would a bubble burst of the market, coupled with AI expenditures and long-term planning look like for the average Joe/Jill? I read somewhere that at least 40% of the country has holdings in the market. Is that true, and if so, does that broaden the potential impact of a bubble pop? I'm thinking shanty towns, panhandlers, roving hungry bands. Too much?
I appreciate your clear analysis, and look forward to following your commentary as our rule of law sadly continues to deteriorate and impact our economy.
First, huge fan. Secondly, your analysis, particularly using the CAPE ratio, is extremely insightful. Some would argue that the earnings of the Mag 7 justify the high ratio, but that was most likely argued the last time it got to these levels.
Additionally, I believe Taiwan is in play for Xi after this illegal and idiotic play by the orange clown show. What happens when TSMC is controlled by China? All scenarios are bad.
I don't have stocks. I don't have a penny in my pocket, and I ran out of bread. The Obama ACA rule about insurance companies spending 85% of the premiums on health care. Oh, wait. Didn't Trump kill that off?
Economics is the "dismal science." Your writing makes economic developments and principles very accessible.
As someone looking to retire in less than 10 years, I've kept my investments aggressive. One takeaway from 2008 and the Obama recovery is that all the talk about markets loving predictability is nonsense, just as the myth about corporations loving efficiency is false. When the Bush, Jr. administration deregulated markets and supported a "shadow economy," investments soared, deals multiplied, and stocks went wild. That was perhaps the most unpredictable period in modern history. Then Obama required greater transparency and stress-tests - all of which strengthen predictability. Major corporations whined and cried and while investments grew, they were lackluster for a recovery.
The dealmakers who have the biggest impact on markets love insider trading, unethical reporting, and back-room, illegal mergers. They hate oversight even though oversight helps serve the nation by bolstering long-term stability; they just want to enrich themselves and the national economy be damned. I expect the stock market to pay off well even as Trump destroys our economy because he will never take regulation or oversight seriously. Dealmakers know this and that's the number one factor to watch.
Sorry to sound so cynical, but this approach has paid off well for me so far.
It may have been John Kenneth Galbraith who said something to the effect that there are two kinds of investors: those who think their investments will rise in perpetuity and those who know they won't and think they can get out in time. Both are delusional.
My eclectic investment strategy was to sell periodically when the market hit a new high, then reinvest the same amount each month, buying more cheap shares if the market declined and fewer expensive shares if the market went up (dollar-cost averaging). If you just sell on new highs, you don't lose money, though you may lose some continued appreciation.
Warren Buffett has been getting out of the market for a while, and it's wise to follow his adage: Sell when others are greedy (the market is high) and buy when others are fearful (the market is low).
Catherine, I have some suggestions for stories. Is there a way to contact you privately? My email is stancrock@gmail.com.
I’m a relatively uninformed retiree who has a financial person handling my quite small retirement portfolio. I’ve studied Ms Rampell’s remarkably easy to understand article and read comments made thus far. I need to do additional reading because I must say, I’m frightened. Lately I’ve been feeling it’s a good thing I’m old and won’t have to deal with what I fear our country will face in coming decades.
Appreciate the indepth analysis in a manner that makes it easy to understand. Very well written.
Great article. I think that if SCOTUS allows the tariffs to continue then the market will sell off but I think they will save the dictator from himself. But, really, this quote from Receipts describes how bubbles end: "Until one day, with no obvious, specific triggering event, markets just imploded." The dot com and housing bubbles could have burst sooner or later than they did. Those who made tons by shorting the housing bubble were correct in their thesis and lucky in their timing. This bubble could have persisted and they would have lost tons. There is no way to know when these things end. Beware the black swan.
Agree on that likely SCOTUS tariff outcome. Wrote about it a month or so ago (though obviously the Xmas target has come and gone): https://substack.com/@catherinerampell/p-178224991
Polymarket currently has odds that SCOTUS upholds the tariffs at 24%.
My supposition is that corporations are, as usual, mostly focused on the short term and not the long term. I think they fall into the category of either actively supporting the craziness of the Trump regime because they truly don't believe in democracy, for example Peter Thiel/Elon Musk. Or they believe that they are smarter than Trump, (Zuckerberg, Bezos, etc.) and can play to his narcissism and outsmart him in the short term at little cost to them. This group assumes that after the Trump regime is over, everything goes back to "normal" in a pre-Trump world. It's not crazy to play that game from a pure economic argument if you believe this is all short term, reversible damage. But I question that assumption. For example, I think foreign investment into the US will be chilled for some time into the future, resulting in higher cost of capital for the US.
Also, I'm hoping that in 2026 and beyond, we don't forget these corporate leaders and what they did to enable the Trump regime, for their personal and corporate benefit. These are the supposed powerful elites who, in theory, had the power to stand up to Trump, but chose to bow the knee when the country needed them the most.
I'm hoping that they pay a price for their actions, and that first and foremost as a nation, we become focused on crafting policies that will be in the best interests of the average American and reflect the fact that America is done with the billionaire elites.
Very well said!
It will get worse. When Trump takes over the Federal Reserve and starts bragging on Truth Social about "running" interest rates and artificially forcing rates to 0% investors are going to say thats it. That's enough.
Yeah, and the guys who can't do heavy labor will work in nursing homes, right? There are staff shortages in all nursing homes, even the ones that cost a fortune.
A few comments...
1) I doubt that I can comment intelligently on economic issues, but I see several possible reasons for why Trump’s policies haven’t hurt the market more.
a) Maybe the tariffs won’t really have as big of a negative impact as most economists have predicted. I can see that there could be a lot of groupthink going on since just about every economist says that tariffs are bad. And most people (including economists) won’t be willing to abandon their long-held beliefs for a long time.
b) Maybe the markets are betting that Trump will cave if the economy really turns sour. I think that was one reason the tariffs haven’t bit that much so far – businesses didn’t think they would stay at those levels for very long so they were willing to eat the costs for now (and they might feel that Trump will bail them out if need be – unless they happen to be in the green energy business). Or maybe they believe that SCOTUS will rule against Trump.
c) Maybe the economy is simply fundamentally more sound that many economists give it credit and can weather what Trump throws at it.
d) Maybe businesses are already looking at Trump as a lame duck and are figuring that his policies won’t survive past his term in office.
e) Maybe this is such an uncertain time that none of the old measures used to evaluate the economy don’t really hold any more.
But what do I know.
2) I think that investment in AI will continue until it simply can’t anymore. There used to be an old joke (“old” as in 40 years ago) that no one got fired for buying IBM. Well, I doubt that anyone will get fired for investing in AI (for the foreseeable future). If the bubble does burst, there will lots of examples of others that business leaders can point to to ameliorate their bad decisions.
An interesting thing to look at is the market against other currencies. If you put the s&p against the euro, it functionally hasn't moved because of how much the USD has dropped. The only reason no one seems to care is because of the reserve currency status, and if the world wakes the fuck up and realises letting that continue is a bad idea, the US is fucked.
What would a bubble burst of the market, coupled with AI expenditures and long-term planning look like for the average Joe/Jill? I read somewhere that at least 40% of the country has holdings in the market. Is that true, and if so, does that broaden the potential impact of a bubble pop? I'm thinking shanty towns, panhandlers, roving hungry bands. Too much?
"Too much?" lolololol!
I appreciate your clear analysis, and look forward to following your commentary as our rule of law sadly continues to deteriorate and impact our economy.
First, huge fan. Secondly, your analysis, particularly using the CAPE ratio, is extremely insightful. Some would argue that the earnings of the Mag 7 justify the high ratio, but that was most likely argued the last time it got to these levels.
Additionally, I believe Taiwan is in play for Xi after this illegal and idiotic play by the orange clown show. What happens when TSMC is controlled by China? All scenarios are bad.
I don't have stocks. I don't have a penny in my pocket, and I ran out of bread. The Obama ACA rule about insurance companies spending 85% of the premiums on health care. Oh, wait. Didn't Trump kill that off?
Pull-forward effects from the One Big Beautiful Bill artificially inflated Q3 2025 GDP.
https://open.substack.com/pub/resultsmatter/p/one-result-of-the-one-big-beautiful?utm_campaign=post-expanded-share&utm_medium=web