7 ms·

What are some realistic alternatives to US markets here? Selling is one thing, the question is what to buy instead? I mean, everyone starting to buy european in

by zppln 8mo ago

What are some realistic alternatives to US markets here? Selling is one thing, the question is what to buy instead? I mean, everyone starting to buy european instead would be great for stock prices, but it wouldn't make the underlying assets more valuable, right?

ares623 8mo ago
Just needs to be more valuable than the US bonds that are 100% gonna tank I guess “I don’t need to outrun the bear. I just need to outrun you. “
munk-a 8mo ago
Well, if we're talking about the value of the underlying assets - then I imagine you have all your savings in gold because the PE ratios in the US stock market are already absolutely insane. If you're trying to escape an expected upcoming crash you don't necessarily need to look for growth but instead stability. Precious metals are always popular but simply shifting a portion of your money into an index fund of a different stock exchange should help minimize your exposure to any catastrophic loss. This is, of course, not financial advice.
toomuchtodo 8mo ago
Sovereign debt of a more politically stable nation state or other monetary union, if you are investing at these levels. If you're an individual, you have more options, although there will be fierce debate about the risk profile (as US Treasuries were historically considered to be risk free). https://www.bogleheads.org/forum/viewtopic.php?t=449401 https://www.bogleheads.org/forum/viewtopic.php?t=449401
- arjie 8mo ago
  The disciple went to his master and said "Master, I am considering stopping doing a thing and starting to do a different thing. But I am not certain what the new thing is that I should be doing". The master turned to the disciple and said: "A better thing" The disciple was enlightened. EDIT: Oh damn it. The entirety of the comment was "Sovereign debt of a more politically stable nation state or other monetary union" at the time I replied. Ah well.
  - deleted 8mo ago
    [deleted]
- kavalg 8mo ago
  But I am having a hard time identifying this union/nation. Unfortunately, it feels like the EU is set on a downward trajectory.
  - coredev_ 8mo ago
    I'm a bit baffled by this - are you saying that you can't identify a single market in the whole world that is worth to invest in & stable except US? Also I don't see that EU as a whole is on a downward trajectory, there are a lot of areas that are super strong, one being the defence industry. US on the other hand - who wants to invest in or trade with them when they treat the rest of the world (including close friends) as shit.
    - kasey_junk 8mo ago
      You can’t invest in EU sovereign debt though, only the constituent countries. The problem is that US treasuries have a bunch of features that can’t be replicated because of the size of the US economy. The only choice that comes close is China whose bonds are too illiberal to trade the same (and China has no interest in liberalizing them).
      - jacquesm 8mo ago
        You can actually, but the volumes are too low to absorb a massive sell-off of US treasury paper.
        toomuchtodo 8mo ago
        So the EU should issue more volume and establish a strategy to start rotating from US debt to EU debt. No one is calling for dumping $8T of treasuries on the market overnight; it's entirely reasonable to start issuing Euro debt and communicating the expectation to start selling down US treasuries to European entities that hold them. "Plan the work and work the plan."
        8mo ago
- loeg 8mo ago
  Which nation states might you consider more politically stable than the US, even now?
  - toomuchtodo 8mo ago
    https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile...
    - loeg 8mo ago
      > The CFR Sovereign Risk Tracker can be used to gauge the vulnerability of emerging markets to default on external debt. Sort of definitionally, nothing in that list is going to be more politically stable than the US. In the second link, the author gives slightly lower country risk premiums (0% vs 0.2%) to Australia, Canada, Denmark, Germany, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Sweden, and Switzerland. Setting aside the practicality of these recommendations (how much debt does Liechtenstein issue? or Germany, for that matter?): in a world where the US is unstable, it's hard to imagine Canada being risk-free.
      - epgui 8mo ago
        Nothing is risk-free. But Canada is certainly more politically stable than the US.
        vkou 8mo ago
        Canada is more internally stable, but is less externally stable, given that invasion and occupation is on the table. Canada needs to pursue further armament (Carney is pursuing a doubling of its defense budget) and training in asymmetrical warfare.
        loeg 8mo ago
        What makes you say "certainly," especially in the hypothetical scenario where the US is unstable? Canada has a relatively much shorter history as an independent nation. Canada heavily benefits from its southern neighbor, and has a host of domestic economic issues (low wages, high housing prices; whatever the farmers are on about) that could cause instability as well. I think Canada is reasonably stable, I just quibble with "certainly" and "more" politically stable as compared with the US.
SilverElfin 8mo ago
It depends on the goal. People buy bonds to play a certain role in their overall investment strategy. China and India have been quietly selling American bonds and focusing on gold / silver / etc. BRICS has also talked for a while about forming their own shared virtual currency but that is further away. You can buy other assets as a store of value too.
heathrow83829 8mo ago
i've wondered this myself. I thought that everyone was selling bonds and just buying equities, gold and bitcoin. isn't that only game plan? bonds aren't investible anymore for anything more than 5 year time horizon.
- thatguy0900 8mo ago
  Bitcoin is going down, wherever they're fleeing it's not that
toast0 8mo ago
If you divest US bonds, you would probably put them into bonds from other nations (and corporate bonds from non-US companies), easiest thing is to try to find a index to track; Vanguard's BNDX tracks the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index (Hedged). In a mark to market world, the value of a bond is its acquisition cost, so buying bonds enough to raise prices increases their value, but not their coupons or their face value. It's hard to make sense of the value of a sequence of payments, it's reasonable to consider the present value and the market price is an easily justified present value for a bond. Selling bonds and buying stocks is a different thing altogether. Selling US stocks and buying EU stocks wouldn't change the value of the underlying assets, however, having an increased stock price does have benefits for the company when issuing new shares or bonds.
- dripdry45 8mo ago
  Large institutions have been moving in this direction for about a year. I just put together a fairly more stable and diversified portfolio that is effectively only about 15% in the US. It involves some short-term private equity, lots of commodities, European cyclicals and financials, some small Deep value, energy and climate change infrastructure is on solid ground and being well funded around most of the world… they really are plenty of bright spots and lots of good advice out there, even from public letters from places like Van Eck, Piko, GMO funds, and others. There are a number of very important categories to avoid, like convertibles, but overall it’s quite possible if you have a little bit of acumen with investing.
  - dripdry45 8mo ago
    Oh, and a bunch of foreign currency baskets and emerging markets debt denominated in the local currency
tick_tock_tick 8mo ago
There aren't any it's why the US takes in such crazy flows.
rixrax 8mo ago
Canada?
downrightmike 8mo ago
Same thing that happened to Spain after the New World gold and silver came in, Inflation (limited local supply to spend on and so prices raise) and debt payments, ultimately leaving Spain poor.
jacquesm 8mo ago
Eurobonds. It may actually happen if this continues. But given the speed of the usual EU decision process I would not be surprised if it takes them longer than the current US administration to finally agree on the various terms. And that's good for Europe in multiple ways. https://commission.europa.eu/strategy-and-policy/eu-budget/eu-borrower-investor-relations/eu-bonds-eu-bills-private-placements_en https://commission.europa.eu/strategy-and-policy/eu-budget/e... In the meantime: German, Dutch, UK (technically not EU), Swiss, Nordic paper is also a good substitute and regardless all you really want to do here is not to hold an asset that may well become a liability so in that sense almost anything is better.
- marcyb5st 8mo ago
  Swiss bonds are super safe, but they have ~0 interest rate and so you lose out on inflation.
  - vdupras 8mo ago
    Well, CHF gained 12% on USD YoY, so I guess that it ends up being much better yields than US treasuries.
    - marcyb5st 8mo ago
      That is fair. Sorry, colored by the fact that I actually live in Switzerland and so investing them in Swiss treasuries is like keeping the cash for me.
      - jacquesm 8mo ago
        That's an easy mistake to make. When you're looking internationally you always have to take the rates into account. For you it doesn't matter, but a lot of parties are investing in Swiss treasuries exactly because it is like keeping CHF. which tends to do well relative to their own. The long term USD vs CHF rate works out strongly in favor of holding CHF.
- robinsoncrusue 8mo ago
zrn900 8mo ago
> What are some realistic alternatives to US markets here? It seems to be precious metals. And at this point in time, especially silver. Even Indian government seems to be stockpiling silver.
- stevenwoo 8mo ago
  At first I was leaning toward FGLD but didn't consider that current admin would blow up everything US, there are European alternatives to FGLD that OP might want to investigate that have physical metal reserves (there are many alternatives that represent various tiers of involvement in mining versus just holding precious metals, I'm speculating OP does not want to possess precious metals themselves).
  - geoka9 8mo ago
    There's KILO if you're cool with your bullion stored at the Royal Canadian Mint.
    - defrost 8mo ago
      A lot of mints about the globe offer remote purchase and local storage, eg: Perth Mint in Australia - https://www.perthmint.com/invest/information-about-gold-and-silver-storage/storage-options/ https://www.perthmint.com/invest/information-about-gold-and-... Physical is great if you like Kangaroos, Koalas, Emus, Dragons, Snakes, Koi, etc. They really need a Quokka: https://www.perthmint.com/shop/bullion/bullion-coins/ https://www.perthmint.com/shop/bullion/bullion-coins/
blitzar 8mo ago
> What are some realistic alternatives to US markets here There is nothing particularly interesting or sexy about US treasuries. You could replace a holding of $8bn to $80bn with equivalent or better rated bonds in a half hour or so. Replacing that sort of allocation of stocks or commodities would be way harder as returns on those assets are not as simple as "pays a 4% coupon each year" - finding an equivalent of Apple or Nvidia is not a trivial task.
deleted 8mo ago
[deleted]

by zppln 8mo ago

ares623 8mo ago

Just needs to be more valuable than the US bonds that are 100% gonna tank I guess “I don’t need to outrun the bear. I just need to outrun you. “

munk-a 8mo ago

Well, if we're talking about the value of the underlying assets - then I imagine you have all your savings in gold because the PE ratios in the US stock market are already absolutely insane. If you're trying to escape an expected upcoming crash you don't necessarily need to look for growth but instead stability. Precious metals are always popular but simply shifting a portion of your money into an index fund of a different stock exchange should help minimize your exposure to any catastrophic loss. This is, of course, not financial advice.

toomuchtodo 8mo ago

Sovereign debt of a more politically stable nation state or other monetary union, if you are investing at these levels. If you're an individual, you have more options, although there will be fierce debate about the risk profile (as US Treasuries were historically considered to be risk free). https://www.bogleheads.org/forum/viewtopic.php?t=449401 https://www.bogleheads.org/forum/viewtopic.php?t=449401

arjie 8mo ago
The disciple went to his master and said "Master, I am considering stopping doing a thing and starting to do a different thing. But I am not certain what the new thing is that I should be doing". The master turned to the disciple and said: "A better thing" The disciple was enlightened. EDIT: Oh damn it. The entirety of the comment was "Sovereign debt of a more politically stable nation state or other monetary union" at the time I replied. Ah well.
- deleted 8mo ago
  [deleted]
kavalg 8mo ago
But I am having a hard time identifying this union/nation. Unfortunately, it feels like the EU is set on a downward trajectory.
- coredev_ 8mo ago
  I'm a bit baffled by this - are you saying that you can't identify a single market in the whole world that is worth to invest in & stable except US? Also I don't see that EU as a whole is on a downward trajectory, there are a lot of areas that are super strong, one being the defence industry. US on the other hand - who wants to invest in or trade with them when they treat the rest of the world (including close friends) as shit.
  - kasey_junk 8mo ago
    You can’t invest in EU sovereign debt though, only the constituent countries. The problem is that US treasuries have a bunch of features that can’t be replicated because of the size of the US economy. The only choice that comes close is China whose bonds are too illiberal to trade the same (and China has no interest in liberalizing them).
    - jacquesm 8mo ago
      You can actually, but the volumes are too low to absorb a massive sell-off of US treasury paper.
      - toomuchtodo 8mo ago
        So the EU should issue more volume and establish a strategy to start rotating from US debt to EU debt. No one is calling for dumping $8T of treasuries on the market overnight; it's entirely reasonable to start issuing Euro debt and communicating the expectation to start selling down US treasuries to European entities that hold them. "Plan the work and work the plan."
        8mo ago
loeg 8mo ago
Which nation states might you consider more politically stable than the US, even now?
- toomuchtodo 8mo ago
  https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile...
  - loeg 8mo ago
    > The CFR Sovereign Risk Tracker can be used to gauge the vulnerability of emerging markets to default on external debt. Sort of definitionally, nothing in that list is going to be more politically stable than the US. In the second link, the author gives slightly lower country risk premiums (0% vs 0.2%) to Australia, Canada, Denmark, Germany, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Sweden, and Switzerland. Setting aside the practicality of these recommendations (how much debt does Liechtenstein issue? or Germany, for that matter?): in a world where the US is unstable, it's hard to imagine Canada being risk-free.
    - epgui 8mo ago
      Nothing is risk-free. But Canada is certainly more politically stable than the US.
      - vkou 8mo ago
        Canada is more internally stable, but is less externally stable, given that invasion and occupation is on the table. Canada needs to pursue further armament (Carney is pursuing a doubling of its defense budget) and training in asymmetrical warfare.
      - loeg 8mo ago
        What makes you say "certainly," especially in the hypothetical scenario where the US is unstable? Canada has a relatively much shorter history as an independent nation. Canada heavily benefits from its southern neighbor, and has a host of domestic economic issues (low wages, high housing prices; whatever the farmers are on about) that could cause instability as well. I think Canada is reasonably stable, I just quibble with "certainly" and "more" politically stable as compared with the US.

SilverElfin 8mo ago

It depends on the goal. People buy bonds to play a certain role in their overall investment strategy. China and India have been quietly selling American bonds and focusing on gold / silver / etc. BRICS has also talked for a while about forming their own shared virtual currency but that is further away. You can buy other assets as a store of value too.

heathrow83829 8mo ago

i've wondered this myself. I thought that everyone was selling bonds and just buying equities, gold and bitcoin. isn't that only game plan? bonds aren't investible anymore for anything more than 5 year time horizon.

thatguy0900 8mo ago
Bitcoin is going down, wherever they're fleeing it's not that

toast0 8mo ago

If you divest US bonds, you would probably put them into bonds from other nations (and corporate bonds from non-US companies), easiest thing is to try to find a index to track; Vanguard's BNDX tracks the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index (Hedged). In a mark to market world, the value of a bond is its acquisition cost, so buying bonds enough to raise prices increases their value, but not their coupons or their face value. It's hard to make sense of the value of a sequence of payments, it's reasonable to consider the present value and the market price is an easily justified present value for a bond. Selling bonds and buying stocks is a different thing altogether. Selling US stocks and buying EU stocks wouldn't change the value of the underlying assets, however, having an increased stock price does have benefits for the company when issuing new shares or bonds.

dripdry45 8mo ago
Large institutions have been moving in this direction for about a year. I just put together a fairly more stable and diversified portfolio that is effectively only about 15% in the US. It involves some short-term private equity, lots of commodities, European cyclicals and financials, some small Deep value, energy and climate change infrastructure is on solid ground and being well funded around most of the world… they really are plenty of bright spots and lots of good advice out there, even from public letters from places like Van Eck, Piko, GMO funds, and others. There are a number of very important categories to avoid, like convertibles, but overall it’s quite possible if you have a little bit of acumen with investing.
- dripdry45 8mo ago
  Oh, and a bunch of foreign currency baskets and emerging markets debt denominated in the local currency

tick_tock_tick 8mo ago

There aren't any it's why the US takes in such crazy flows.

rixrax 8mo ago

Canada?

downrightmike 8mo ago

Same thing that happened to Spain after the New World gold and silver came in, Inflation (limited local supply to spend on and so prices raise) and debt payments, ultimately leaving Spain poor.

jacquesm 8mo ago

Eurobonds. It may actually happen if this continues. But given the speed of the usual EU decision process I would not be surprised if it takes them longer than the current US administration to finally agree on the various terms. And that's good for Europe in multiple ways. https://commission.europa.eu/strategy-and-policy/eu-budget/eu-borrower-investor-relations/eu-bonds-eu-bills-private-placements_en https://commission.europa.eu/strategy-and-policy/eu-budget/e... In the meantime: German, Dutch, UK (technically not EU), Swiss, Nordic paper is also a good substitute and regardless all you really want to do here is not to hold an asset that may well become a liability so in that sense almost anything is better.

marcyb5st 8mo ago
Swiss bonds are super safe, but they have ~0 interest rate and so you lose out on inflation.
- vdupras 8mo ago
  Well, CHF gained 12% on USD YoY, so I guess that it ends up being much better yields than US treasuries.
  - marcyb5st 8mo ago
    That is fair. Sorry, colored by the fact that I actually live in Switzerland and so investing them in Swiss treasuries is like keeping the cash for me.
    - jacquesm 8mo ago
      That's an easy mistake to make. When you're looking internationally you always have to take the rates into account. For you it doesn't matter, but a lot of parties are investing in Swiss treasuries exactly because it is like keeping CHF. which tends to do well relative to their own. The long term USD vs CHF rate works out strongly in favor of holding CHF.
robinsoncrusue 8mo ago

zrn900 8mo ago

> What are some realistic alternatives to US markets here? It seems to be precious metals. And at this point in time, especially silver. Even Indian government seems to be stockpiling silver.

stevenwoo 8mo ago
At first I was leaning toward FGLD but didn't consider that current admin would blow up everything US, there are European alternatives to FGLD that OP might want to investigate that have physical metal reserves (there are many alternatives that represent various tiers of involvement in mining versus just holding precious metals, I'm speculating OP does not want to possess precious metals themselves).
- geoka9 8mo ago
  There's KILO if you're cool with your bullion stored at the Royal Canadian Mint.
  - defrost 8mo ago
    A lot of mints about the globe offer remote purchase and local storage, eg: Perth Mint in Australia - https://www.perthmint.com/invest/information-about-gold-and-silver-storage/storage-options/ https://www.perthmint.com/invest/information-about-gold-and-... Physical is great if you like Kangaroos, Koalas, Emus, Dragons, Snakes, Koi, etc. They really need a Quokka: https://www.perthmint.com/shop/bullion/bullion-coins/ https://www.perthmint.com/shop/bullion/bullion-coins/

blitzar 8mo ago

> What are some realistic alternatives to US markets here There is nothing particularly interesting or sexy about US treasuries. You could replace a holding of $8bn to $80bn with equivalent or better rated bonds in a half hour or so. Replacing that sort of allocation of stocks or commodities would be way harder as returns on those assets are not as simple as "pays a 4% coupon each year" - finding an equivalent of Apple or Nvidia is not a trivial task.

deleted 8mo ago

[deleted]