I was 50% bonds, 50 % US equities. About a month ago, after tariff threats seemed to become serious, I switched the equities from Canadian to US, anticipating a decline in Canadian equities and a continued rise for a few months in US equities.
Today I switched to about 85 % bonds, 15% money market. I have been watchful for a couple of months, thinking I might want to do that maybe in March or April after a bit more bull market, but nope, I decided today after mulling it for a few days.
I think the stock market has become too risky right now, for me that is. It has basically gone sideways since the middle of October, with a bump up and back in the middle.
I think that the orange chaos agent, despite having a degree in economics, is incompetent about the subject. The single biggest indicator is that he seems to think he can magically switch the US economy overnight from taxation to import tariffs. He has some supposedly sane billionaires in his cabinet, but indications are that he is going to be headstrong and have his way. He probably picked them by questioning them on what they think of tariffs, so they might be compliant.
My biggest risk is that I don't understand this stock market this day/week/month. I think what is happening is that investors are being slow to react because many of them don't see tRump as a black swan (bronze swan?) yet. I don't think they are taking the deportations seriously enough and the tariff war seriously enough. Predictions that I've seen or heard for 2025 are sort of like a continuation of 2024 when we had a sane President who has done a great job managing the economy (to the limited extent that the Executive branch can influence things -- substantial but far from commanding).
I don't know why the SP500 has not fallen below October levels. I don't know why the Canadian market has not under-performed the US market lately. The only reasons I can think of are first that investors are imagining tRump 1.0 instead of the emboldened 2.0 plus Project 2025. Second, I think there is a lag with the analysts and pundits, etc., such that many investors just go on autopilot fixed allocations in their portfolio and don't tend to try to time the market. Many analysts go on recent earnings and such, so they do not apply forward looking intuitions. Generally that is a wise approach: diversification and not timing the market. Perhaps I'm a bit bolder in that department.
I will sleep well tonight. Not that I was sleeping badly from worry (I wasn't) but good sleep is worth something.
= new reply since forum marked as read