I’m reminded when it was possible to load up on tech-heavy stuff before the tech bubble in the late 90s. Maybe they should at least offer gold as an alternative. Could get very Bubblicious.
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A lot of large US companies already allow their employees to invest their 401k in anything they want via things like Fidelity’s brokerage link
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This may be more of a soft recommendation that these investments are worthy? A lot of unsophisticated investors may thus be influenced to invest even though they don’t understand the risks? Although I guess you could say that about a lot of other things.
Bottom line is that it will juice the value of the crypto companies that Trump administration members own.
These crypto fantasies always bring Guys and Dolls to mind. Good stuff.
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There are restrictions on what kind of assets you can have in 401ks. No speculative option trades (I think you can write covered calls and possibly by protective puts, but no risk seeking strategies).
Could be paywalled for you. It has a bunch of concerning indicators about the US economy and the stock market. Here are 2 charts from it
I’m sure someone has looked at it, but perhaps it’s not available in the media, etc…
I’ve been hearing a lot recently that a lot of the growth in the stock market has been by a limited number of giant companies (e.g. NVIDIA, Apple, Meta, Google, etc.). Everything else has been largely flat. Where these companies are somewhat global, I wonder if it would be possible to see these numbers if you limited it to US sourced portions of the earnings, etc. It would be interesting to see if US earnings collapsed awhile ago and the growth was being propped up by global expansion/growth.
A few factors to think about in those charts:
- Tax policy changes: 2003 on the dividend tax rate and 2017 on the corporate tax rate
- Inflation expectations vs fed policy - you could rationally expect higher future nominal dollars of earnings relative to current economic measures if you expect a divergence from historical policy
- US fiscal policy - the government is borrowing a lot with no end in sight and I think the balance will mostly end up finding its way into corporations.
- Baby boomers have wealth beyond their capability to spend down in retirement.
AI is creating a lot of noise and possibly a bubble in those large companies mentioned. It certainly seems like it should make workers more productive. I expect there is more enthusiasm being priced on over the potential short term benefits compared with the longer term consequences. But we also keep finding new ways to employ workers in the US economy over the longer term even as automation has been disruptive to specific industries over the decades.
I’m definitely finding that AI is good for solving my coding questions and doing a bit more on my computer.
Management wants us to replace stock assessment models with AI. I’m not convinced that’s a start move.
You can invest in 3x leveraged ETFs
Crypto ETFs exist
With access to brokerage link you can pretty much invest in anything. It’s really up to your employer whether or not to give you access to something like brokerage link through fidelity
Yeah, 3x leveraged aren’t exactly what the average person thinks they are. But, yes, some things can be generic-risky. And crypto is coming. What a fun thing that will be.
It’s looking like a market melt-up. I struggle to see where this doesn’t end with an air pocket straight down.
Irrational exuberance?
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I noticed my dividend ETFs seemed to lead the melt up, so I suspect it might be the underlying interest rates. These are also lagging the broader S&P this year as they were punished a bit when Trump’s liberation day hit the bond markets.
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Perhaps not all that irrational.
Most equity is owned by the top of the wealth pyramid. That group has to invest somewhere. And they have a lot of investable income. That’s the demand.
Not a whole lot of “new supply” . A lot of small companies are actually simply absorbed by larger firms, often to either protect an existing market or to get a jump start in another. It’s actually the stated goal of so many tech start ups…sell to a bigger firm and pay off the VC.
And where will the new profits come from to sustain this rise in PE? Well, the administration has clearly stated its goal to do more privatization( business>government postulate). At the same same time..DOGE! Eliminating workers from the govt payroll. It doesn’t take a rocket surgeon to see that the work they did will be handed off to private contractors. Weather service goes private, that sort of thing. That will most assuredly result in more profits somewhere. And Uncle Henry and Aunt Em are not going to get any federal contracts any time soon.it will be larger firms that have a presence in DC.
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Yes. One has to distinguish between Wall Street and Main Street.
This reflects my current thinking.
https://www.reuters.com/markets/markets-trade-deal-euphoria-ignores-tariff-reality-2025-07-24/
We don’t discuss individual stocks much, but UPS … woof. We’re getting down toward levels not seen since January 2016. If it goes through $90, it could go down another 20% from there.
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Who knew that we could have a serious down day in the market, much less 4 down days in a row like we’re staring at?
[Will not be surprised if TACO and we end up +1% or so.]
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