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Wall Street is turning its back on Trump and flashing an economic warning. (lite.cnn.com)

submitted 2 weeks ago by [email protected] to c/[email protected]

11 comments fedilink hide all child comments

On-again, off-again tariffs, mass government layoffs, funding cuts and immigration crackdowns have seriously spooked Wall Street, which is emphatically rejecting President Donald Trump’s chaotic economic agenda.

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[–] [email protected] 8 points 2 weeks ago (1 children)

I won't say that this isn't good advice, but I've always thought the subtext of this advice was

Please keep your money in The Market so we can keep leveraging it.

Please keep your confidence in The Market.

PLEASE don't start a run on our banks and clearing houses.

Trying to time the market is risky, but ignoring your money isn't zero-risk either. Nothing grows forever no matter how much Capitalism insists it does.

[–] [email protected] 1 points 2 weeks ago

I won’t say that this isn’t good advice, but I’ve always thought the subtext of this advice was

Please keep your money in The Market so we can keep leveraging it. Please keep your confidence in The Market.

We're not talking about designing systems for our society. We're talking about the options available to today's individuals. As individuals, you have two choices:

Use the established patterns and rules and extract value from investing
Ignore the established patterns and try to "roll your own".

If you go with #1, you've got a set of assumptions.

financial system that is mostly functional since 1929ish.
this system delivers consistent returns (over a long enough timeline)
an amount of transparency required by law enforced by the SEC, FINRA, and other agencies
government will provide regulation and liquidity to keep the system afloat
most importantly, regular inflation will slowly eat away at the value of a person's money so a moderate return is required simply to maintain today's buying power with the money you have

If you go with #2:

you have few if any government regulatory protections on your investments
likely no injection of liquidity if a financial crisis occurs.
investment opportunities available to you will be highly speculative or "wild west"
still required to chase a return that at least equals inflation, except you'll have no protections

PLEASE don’t start a run on our banks and clearing houses.

You can choose to invest and save under the assumption that bank runs will occur. It will deny you the most historically safe and highest returning investment options available to regular individuals that has worked approximately for the last 100 years. Storing cash or gold under your mattress carries its own risks far above anything in the market.

Trying to time the market is risky,

Agreed.

but ignoring your money isn’t zero-risk either.

Also agreed. Where did I suggest ignoring your money? Instead I even called out that if you are closing in on retirement, then a portion of savings should be removed from the market because of the risk of short term volatility. How are you taking my statements as ignoring your money?

Nothing grows forever no matter how much Capitalism insists it does.

Well sure, the heat-death of the universe is a known absolute end. Even prior to that there will be an infinite amount of things that would end growth sooner. Do you, as an individual in the USA (401k reference from OP), believe you should plan you retirement savings assuming capitalism will stop working in your lifetime?