Key insights
- An experienced investor expresses concern about potential market instability due to geopolitical risks associated with the current administration, drawing parallels to the 1973 oil crisis. The investor is considering liquidating their portfolio to hold cash, fearing a significant market downturn and prolonged recovery period. This reflects heightened risk aversion among some investors due to political and economic uncertainty.
I've been investing my own portfolio since the 1990s, mostly just buying and holding a conservative mix of stocks and bonds. Right now, I fear Trump is destabilizing the world economy and markets worldwide will implode. The last time the world suffered oil shock was in 1973 (https://en.wikipedia.org/wiki/1973\_oil\_crisis). People were lined up at gas stations day after day for months. The market in the US cratered and we had serious knock-on inflation until the early 1980s as a result. Long term interest rates rose to 17%. Every day since Trump started this war, I think about liquidating my entire portfolio and just holding cash. There doesn’t seem to be any kind of exit strategy and Europe certainly doesn’t seem eager to entangle themselves in what seems like Trump’s Folly. Full disclosure, I worked in finance for many years and I’m now in my 70s. I don’t have time to recoup if the market does implode.