Alright, so I (based in Europe) have a solid 6 figure amount in individual stocks and ETFs – almost exclusively US tech companies and NASDAQ etc though. And I have been doing well with that.
The thing is though: if the US would indeed invade Greenland, it will definitely have devastating consequences on the American economy and Europe would essentially ban American companies from operating in Europe.
So I am looking into how I can de-risk my portfolio – happy to hear your opinions on that.
De-risking strategy in case of US stock market tanking
byu/AverellCZ ininvesting
Posted by AverellCZ
21 Comments
You can’t right now unfortunately. The entire world economy revolves around the US and its dollar.
less equities
Well, is the USA going to invade Greenland? It remains to be seen. People have fumbled TSM thinking China would invade Taiwan for years. Is it going to happen or is it just Madman Theory?
Nothing wrong with more global exposure. Add European, Developed Markets, and Emerging Markets exposures. That said, it may not fully offset a downturn in your given nightmare scenario. There will likely be major global market volatility.
The usual answer is gold or european defense stocks. Normal european stocks will also tank in such a scenario. I have rotated into more gold and less S&P500 over the last months.
The Trump said this so X will happen has been an absolutely horrendous trading strategy so far. Good luck.
Personally I have bought a dozen international funds over the past 6 months and they are beating the S&P by 50-100%.
if the US economy will have a significant drawdown, a valid hypothesis in my opinion is that gold and silver is pretty likely to go up in value despite it being pricy already. If the US is highly in-stable there are not many other options right now where the capital could go
Invest in EU defense. If shit goes tits up they will grow even more.
RHM, SAAB, BAE
I’m a fan of investing in the broad market. Not just US large-caps, which are tech-heavy, but mid-caps and small-caps along with broad internationals as well. Personally I also have a small gold allocation, but that’s not something I’d call absolutely necessary.
pretty much all global assets are so correlated at this point international exposure doesn’t give you the protection that it once did. No one knows for sure Exactly what XUS stocks are going to do in the next downturn but chances are the performance will be similar.
Personally, I still run a 50% VX US allocation in my tax-advantaged accounts.
Just looking at the allocations even in the passive indices feels lopsided. US accounts for ~70% of world developed market cap. Tech accounts for ~50% of US market cap. If you buy into long term reversion theory then you can make a case it should go into more of a long run rebalancing. So doesn’t have to be Greenland or maybe that is a catalyst. It doesn’t even have to be a crash. It could just be structural outperformance of international compare to US (see 2025 performance).
How do you hedge that? You can just have a more international exposure. Less NASDAQ etf, less VOO. More world ex_US maybe some emerging markets. Plug your target funds and weights into some online portfolio analyzer and check your region allocation mix to set your long term target weights.
Added 10% NT Europe to my mix at the cost of 10% less NT World (has 60-70% US exposure). Not only derisking but also deliberate increasing EU investment.
Early on I started fairly large slices of my contributions in a total bond market fund and small/mid cap index and value funds. Overall, probably something like 40% of my holdings are in that side of the mix. The value stuff has really changed course from being drags recently and this market being full of investors looking for hedges has helped. The bonds haven’t been amazing but it’s an 8% slice that’s locked in with some small holdings in precious metals so it has done what it is supposed to do–not lose money.
Congress seems to be pretty active in limiting the military BS at this point, we’ll see what happens.
$SPD
Do what the BRICS nations and Central Banks are doing. Buy gold and silver (real assets) and hold less fiat paper claims
I switched from mostly S&P 500 to mostly broad emerging market ETFs when Trump announced his tariffs way back when and I’ve been very happy I did. Particularly when you account for the value of the USD.
This has nothing to do with Greenland but VXUS, Gold, Bitcoin.
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Man do not buy into the propaganda the USA is not going to invade Greenland it will never happen becuase 80% of the population will not allow that, it goes against everything we stand for that would start a revolution here in the us , iam a conservative I voted for trump , as did all my friends and family , I live in the south and everybody, feels the same way Now having said that I have put stop loss orders on all my tech and ai investments to preserve profit
There is a 0% chance the US invades Greenland. TACO is an acronym for a reason. The problem is the US doesn’t have to invade Greenland, it’s already shattered a century of good will and trade with allies. You and every other person on the planet is thinking the exact same thing, sell America. It becomes a self-fulfilling prophecy from retail perspective, but greed at the institutional level is extreme and they only care about making money. Personally, I think it’s way more likely the US stock market jus goes straight up from here until it explodes into a 70% correction over 5-10 years.