The Collapse That Will Change A Generation ?

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Markets constantly change - they are never frozen in time.

You are advocating that folks should dump US equities because you reckon you know what’s going to happen in the future.

Grand, it’s your money.

I don’t know what’s going to happen in the future so I will stick with a global equity index fund and will let the market decide how much is allocated to US equities - today, tomorrow, 30 years from now.
 
Yes I am but what do I know apart from extensive reading on the subject. I have no crystal ball but I do like to challenge conventional thinking and do feel there is too much group think and beating down of opinions that dont conform to the group thought on this site. I'm just encouraging people to research the topic and form their own rational opinions.
 
conor_mc said:
that can make a huge difference if deployed at scale. I
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I would hazard that the wars and required rebuilding in ukraine and Gaza plus a few forest fires outweighs all the "progress" made so far. Meanwhile both the UK and Ireland continue to pump sewage into the sea untreated but ignore this as it is not as cool to promte as climate.. And these are developed countries.
 
Flybytheseat said:
It's not about climate change. It's about the fact that the US national debt is 125% of GDP putting them on course for an Argentinian type default within the next three years. They have no levers to come back from the brink and they are adding 2-3 Trillion dollars a year to their >36 trillion national debt. They are up there with all the bananna republics. There has to be a reset in the world economy with the US declining to insignificance and the emergence of eastern economies as the world's economic powerhouses.
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I believe the US stock market and dollar are being re priced downwards but this is just another cycle we had the same after the 2001 dot com crash, US stock markets and dollar were out of favour which lasted for a decade, also had the inflationary cycle in the 1970s much worse than today . Also regarding debt to GDP 125% is not really that extreme historically, Britain had much higher debt to GDP ratios after WW1 and WW2 and they never defaulted on their debts. However I do believe that the pension funds and the global ETFs were too heavily weighted to US stocks, 70% is way too much concentration on US, there must have been a positive feedback loop that kept funneling all this money into those few big tech stocks which suddenly got disrupted over the last month
 
If global equity funds can be relied on to diversify with well performing companies no matter where they are located then it doesn't seem like bad advice to invest in such a fund no matter how the US economy performs. Especially for those who aren't interested in researching deeper into investing.

Returning to the title of the thread, I think there won't be a sudden collapse that will change a generation but a thousand little cuts over the coming decades to things we've come to take for granted in our standard of living since maybe the late 90's. As we've already seen happening for some time things that didn't use to cost anything will have a price, things that were affordable and commonly enjoyed will become more and more co-modified that they will all become luxuries reserved for special occasions.

My concern is things like demographic changes and cost of living challenges in to the future will put brakes on stock market returns. The last 10 - 15 years will be viewed as a golden age for global wealth creation, pension fund growth, generous government hand outs that never used to exist. And this era will be seen as wasteful because it could never last, that it became more and more irrational exuberance built on a house of cards.
 
If you think you have an investment edge, then by all means deviate from the market consensus.

I don’t pretend to have any such edge - I’ve no idea what’s going to happen tomorrow.

So, logically, I will stick with a global equity index fund.
 
That the Dollar will collapse / etc - and the world will end - this is stated every single day for ages in countless of Youtube videos etc.

The video also is ignoring that the US is still one of the leading centers in AI (Europe is nowhere to be seen here) and other high technology - and if the Dollar loses value US exports become cheaper.
The video is terrible - Europeans are still poorer than the US and very likely continue to be that way. China will not be able to replace the US consumer with any other market - especially not with Europe.

I will also stick with the global equity index fund in my pensions.
 
Merowig said:
will also stick with the global equity index fund in my pensions.
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Ask long as you understand (and I'm sure you do) that carries both an equity risk and a currency risk for people like us not spending their eventual investment drawdown in Usd. The market consensus is hugely driven by more active american investors who will draw down in Usd. I think this is one of the points that is trying to be made on this thread.
 
Since recent past large drops in share prices (2008, Covid) turned out to be excellent buying opportunities, I expect that a collapse now would require a substantially more alarming event than those, as otherwise people will just pile back in as soon as prices have dropped a bit as they will believe the prices will eventually go up again.

An obvious example of such an event would be a hot war between the USA and China, but I think a more plausible one would be something that shakes this belief:
the US is still one of the leading centers (sic) in AI... and other high technology.
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We already got a glimpse of this from DeepSeek. Imagine that next week DeepSeek or another Chinese company releases a new AI model that is unquestionably substantially better than anything produced by the USA. Try to feel how sentiment towards the USA would change with each passing month when American companies continue to fail to produce anything comparable.

The world keeps pouring money into the USA because of its image of being a technology leader. That sentiment is therefore extremely valuable, but in my opinion it is fragile and could be lost within a few months in the situation I described.
 
I don't really share the doom and gloom. AI, new forms of nuclear reactors, electric cars, cheap renewables and new technologies that haven't been invented yet will drive innovation and growth for the foreseeable future and will also shift us away from carbon.

The US stock market might tank or it might not. If the market decides that the true value of the US market is lower than its current pricing I'll keep investing in it and make gains when it bounces back through my global fund. Reversion to the mean and all that.

To my mind, recent events only serve to emphasise the importance of global diversification (including emerging market exposure). Going all in on North American equities was always taking on a risk you didn't need to.
 
userabc said:
We already got a glimpse of this from DeepSeek. Imagine that next week DeepSeek or another Chinese company releases a new AI model that is unquestionably substantially better than anything produced by the USA. Try to feel how sentiment towards the USA would change with each passing month when American companies continue to fail to produce anything comparable.
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That's a big if, Deepseek was an innovation that short circuited it's way around alot of the expensive US AI technology to get to an acceptable outcome in many cases.
It's not really a stand alone innovation as it still requires alot of the US technology to work. It didn't need the most advanced nvidia chips but it's still required nvidia chips to work.
It is Taiwan that is the global leader in chip manufacturing not really China as the US has withheld its most advanced chips from China due to geopolitics and fears of it stealing intellectual property . All this pre dates trump tariffs and was actually brought in under Biden.
Also the indications are that trump is back pedalling as fast as he can from tariffs
 
The current AI is a fad, like virtual reality and augmented reality was the latest thing a few years ago. Businesses are spending big money on it, but most of what I have seen is no more than a Expert System. Do you remember them? Big in the late 80s and early 90s when computers were supposed to take over the roles of doctors etc. Lots of rules fed into an inference engine to diagnose issues and provide an answer.
 
Towger said:
The current AI is a fad, like virtual reality and augmented reality was the latest thing a few years ago. Businesses are spending big money on it, but most of what I have seen is no more than a Expert System. Do you remember them? Big in the late 80s and early 90s when computers were supposed to take over the roles of doctors etc. Lots of rules fed into an inference engine to diagnose issues and provide an answer.
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I too think the potential productivity gains are overstated. It is useful though for taking meeting notes on video calls, generating draft documents and presentations so is already increasing productivity. I see a big use for AI in the drug / molecule discovery arena so believe it's a game changer for pharma research and development. Self driving busses, Luas's, Trains and Taxis will likely be a reality in the next couple of years. Social media content moderation jobs will also be impacted as will many secretarial and administration/ accounts roles. Also many IT roles and coding. It is definitely a plus and has the potential to boost productivity significantly. It's a pity that the next generation will use it to get out of doing school & college assignments so human productivity will suffer. Fake news is another impact so it will become harder to discern real news from fake.
 
Flybytheseat said:
Social media content moderation jobs will also be impacted as will many secretarial and administration/ accounts roles. Also many IT roles and coding. I
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We are already seeing it today with intel job cuts, they want to eliminate alot of "bureaucracy " and management roles to focus on engineering and manufacturing. They mentioned about making use of AI to achieve that I think aswell.
 
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