The US, Europe and China are all gearing up their military spending.
Given the current global economic chaos, what will be the effects of this surge in spending have on the worldwide and national economic picture?
All of that military spending is juicing foreign markets, but not only that, the actions of the US President and his Treasury Secretary and Trade Representative, and the US Congress are causing a loss of faith in the US Dollar, which is causing a tail-wind for non-US Dollar assets:
Year-to-date 2025 market performance:
STOCKS
Developed countries exUS: 16.51%
Emerging markets (China’s about 40% of this): 10.02%
NASDAQ: -0.24%
S&P 500: -0.89%
BONDS
Foreign Treasury bonds (developed, not EM): 8.46%
US 10-year Treasury: 2.76%
ALTERNATIVES
Gold: 27.93%
Bitcoin: 16.76%
We Americans as a group are very poorly informed about other countries, cultures, languages, and ultimately how to enrich ourselves by looking for opportunities throughout the world.
Let me suggest that we’re in the top of the first inning of this rotation away from US Exceptionalism. It’s not late to diversify your portfolio into other geographies. And it’s not hard. Let me suggest two ETFs:
VT - just own the whole world, or ACWV a low-volatility version of own the whole world. These are both stock funds.
Year-to-date 2025:
VT +4.11%
ACWV +8.07%
Disclosure: I own only exUS stocks, I own a chunk of exUS developed Government bonds, I own a chunk of gold, I have a lot of US cash and short-term bonds and inflation-rpotected bonds, and my portfolio is up 6% this year, and it just hit a record high on 5/22/25. It just slowly grinds higher. The year is 5/12 done, at this pace I’ll be up 14%-15% this year. Then I’m retiring in 2026.
Everything I own is simple ETFs. Buy them at Schwab, Fidelity, Vanguard, Robbing Hood, IBKR, e-trade, Merrill Edge, anywhere.