In my upcoming book, Evidence-Based Investing, one of the things I talk about is how a national financial crisis would become part of your personal financial crisis.
For the last couple of weeks, we have been hearing about President Trump's so called, One Big Beautiful Bill. In our video from a couple of weeks, ago, we said it was one big ticking time bomb.
Since the Republican-lead House passed the bill, it has been facing increased scrutiny. Regardless of your political affiliation, you should care. While the jury is still out, the evidence suggests that the bill could very well increase our deficit.
And we cannot afford that.
Unfortunately, our nation's political leaders have been increasing the deficit since the 1970s. Each time we run a deficit, it just adds more debt.
Wanna guess what the #1 reason nation states fail?
Too much debt.
There's a lot of history on this topic.
Sadly, many nations have defaulted before.
Even worse, too many in Washington D.C. do not study history.
It's actually a little egotistical for us to even think that it can't happen to us.
It can.
That's why President Trump should not be calling for One Big Beautiful Bill.
He should be asking for One Big Beautiful Battle Axe.
It's too late for a scalpel.
We need to take a battle axe to the federal budget.
How does this apply to you?
Well, if you are managing your risk correctly, you could argue it may not impact you ... UNLESS, the crisis blows up. Therefore, we all should be leaning on our elected officials to start reducing the federal budget.
What do you think? Do you think the nation needs to reduce spending? In the video I give one example that I think would be an easy cut. If you disagree, that's fine. What would you suggest instead?
In terms of the stock market, you will also see that while the NASDAQ index has had a very impressive rally off the April 7th low, about 67% of the NASDAQ stocks are STILL in a down-trend.
So, while it appears that "the market" has recovered, please remember to stop focusing on the major indices. Those indices are cap-weighted, so only a handful of stocks move the index. While some of the biggest names have moved up, many many stocks are still in a technical downtrend.
Be wise. Manage risk.
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