r/investing Mar 31, 05:46 PM
Possibility of long term damage to US market I’m seriously considering a large investment into VXUS at the moment to balance out my portfolio. Obviously, the typical advice is true, time in the market over timing the market etc etc etc
However, it seems like the current Iran situation has been much more damaging for international markets, at least in the short term. So perhaps it’s not the best time.
While the US market has outperformed international markets historically, I’m concerned that the current administration could seriously harm US markets for 10+ years.
A couple reasons:
* Indiscriminate tariffs: this could have a serious impact on trade relations internationally for at least the rest of this presidential term. Even if they end relatively soon, this damages the trust in the US’s largest trade partners. When countries turn to places like China for stability, trade, and finance, it seems unlikely they’ll pivot back to the US immediately.
* Militarism: the actions in Venezuela and Iran definitely do not inspire confidence. The US has taken military actions many times before, but these recent times have been without the support or notice of even America’s closest allies. Seeing the beating that the Gulf countries have taken, it’s possible that the US is no longer seen as a reliable allie, if not a dangerous liability.
* Internal investment/government subsidies: with the exception of AI, I can see the US missing out on emerging technologies like renewables and quantum computing. The lack of investments in infrastructure and institutions could be even more problematic. A decline in the quality of transportation, the electrical grid, public schools, healthcare, and universities could have consequences that reach decades into the future. Every industry is held by these functioning properly.
* Continuing political instability: the current administration may not be a fluke. US politics have become increasingly polarized and extreme for quite some time now. Despotic and incompetent leadership may become more normalized and tolerated.
I’m not trying to make things out to be cataclysmic. But I do see the US in a position of slower growth, at least compared to the rest of the world. The best case scenario is a complete return to normalcy with the next presidential term. That’s several more years of instability. At worst, we’re seeing the start of a slow and long decline of the US as an economic superpower.
submitted by /u/80MPH_IN_SCHOOL_ZONE
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