The World Has Shifted. So Must We

The United States is once again an imperial power. Called “Realism” by General Kellogg, and others in the Trump orbit, the rest of us can recognize what the United States of America is doing as naked aggression. From the demands on Denmark for Greenland, Panama for the Canal, Canada for all of its territory, Gaza in Palestine, and Ukraine for its mineral resources, the U.S. under Trump has switched sides from working with the democracies of the world to becoming one of the Axis of Chaos (Russia, China, Iran and North Korea). This does not mean that there are not still many good Americans resisting this transformation internally. What it does mean, though, is that those who believe in democracy and the rule of law must wake up to recognize what is going on, let go of what used to be, and build toward what comes next.

Both domestically and internationally, those who believe in democracy and the rule of law are currently on the back foot. Surprise, alarm, indignation, and shock have led to the Flight, Fight, Freeze, Fawn, or Faint (5F) trauma response. We can see it in the actions of the democrats inside the United States, the leaders of NATO, the European Union, Colombia, El Salvador, Panama, and Ukraine. As each interacts with Trump and his team, they have at least one of the 5F responses. It is time to move beyond these responses and begin to act with others to adapt to the situation which exists and find a way to thrive in the future.

Recognizing what is

Donald Trump views himself as a strong man. He likes others he sees as strong men, such as Vladimir Putin, Xi Jinping, Benjamin Netanyahu, Kim Jung Un, Victor Orban, etc. He has joined, and talked the electorate of the United States of America into joining, their club. The United States of today is an imperialist country intent on upending what was the world order to carve out spheres of influence. Trump and his team have declared this intent.

From quickly reaching out to Russia, behind Ukraine’s back, to make a “Peace Deal” what Trump has done is provide Russia an economic and political lifeline. By accusing Ukraine of starting the war, and making a separate peace with a declared enemy of democracy and the rule of law, he is sacrificing the victim to get closer to the aggressor. The reason for this is Trump does not care about Ukraine, about European security, or what Russia does in its “near abroad”. What Trump wants is a blank check to operate across the Americas, leaving Europe to splinter while fending for itself against an imperialist Russia.

Trump is working to copy Russia’s playbook domestically and globally. Within the United States’ borders he is sidelining any resistance and eliminating any threat to his regime. He has moved quickly to attack what his team call “The Deep State” by eliminating entire government agencies funded by Congress. This gives him a three-for by removing those experts who would resist his policies on the grounds they are illegal, silencing Congress by removing its Power of The Purse, and going around the courts by ignoring legal rulings and threatening judges with impeachment.

Regionally, Trump is also copying Putin’s playbook by threatening his neighbors and farther afield to create a sphere of influence in the Americas and the Middle East. Perverting the Monroe Doctrine, which declared the America’s off limits to conflicting European Powers in the 19th century, Trump and team are declaring open season on Canada, Panama, Greenland as areas within the United States “backyard” sphere of influence who will be under U.S. control. Going beyond that, he is working to “Own” Gaza, turning it into a construction and development site by removing the two million Palestinians who live in what is left of the area after Israel’s comprehensive destruction. There is a reason Trump has espoused the greatness of President McKinley beyond tariffs. It is because it was under McKinley the United States became an imperial power. Trump wants to recreate that.

We are in a world where the United States is an agent of violent change to borders, lives, supply chains, economic power distribution, and the international legal system. We need to see the United States for what it is now: a regime led by a tin-pot dictator on par with those this dictator admires.

Letting go of what was

Recognizing the United States for what it is today is to let go of what it used to be. It was never perfect, and it is responsible for some horrible acts in the past, yet the United States was a sponsor and original founder of an international system based on the Rule of Law, on democratic institutions, of collective security through NATO, on free trade and international cooperation to solve international problems. We must let go of that notion of the United States. It does not currently exist and may not exist again in that form. This does not mean giving up on those Americans who want such a country to exist again. This does not mean letting go of these ideas and ideals. This does not mean we cannot support those working to create these things anew.

What it means to let go is to get over the shock of what is happening now. Get over the daily deluge of attacks against democracy, NATO, the rule of law, free trade, international institutions, and begin to expect this from The United States, Russia, and others.

What this means is rather than grasping for what was, we need to look forward and start to build what comes next.

Building What’s Next

There are still many in the world who believe in democracy, the rule of law, free trade, international institutions, the rights of people to live their own lives, collective security, and the obligation of those who lead to represent the people, not dictate to them. Those who believe in these things must work together to build systems across the world. Whether that means countries working together or people working together despite their country’s current government, there is work to be done to build a new global system based on respect, dignity, collaboration, collective action, law, representation, sustainability, and caring about the people who make up the system.

None of us know exactly what this world will look like in the end, but we do have a kernel of it in the ideals of the founding of The United States of America and of the European Union. There is a reason so many people immigrated to the United States so much over the past 200 years, and are arriving in the EU, and striving to join the EU now. The concept of different people coming together with a shared ideal of what can be, working to build toward those ideals, and finding a messy democratic way of turning those ideals into imperfect yet resilient realities. Over time evolving those realities to meet the needs of the people more effectively, and through the actions of all together creating something no one country or group could have created alone.

It could be something like a democracy union, with like-minded countries, regions, or people subscribing from across the planet.

Whatever comes next, the key is to begin building it today. We who believe in something other than dictatorship must offer an alternative. We who believe in democracy must offer opportunity. We who believe in the rule of law must offer hope to those who now find themselves behind walls they did not want built.

There is a world beyond this current chaos. It is time to move beyond shock, let go of what’s been lost, and begin building something even better than what we had before. I am not thankful to Putin, Trump and others for the suffering they are inflicting on millions of people around the world. I am, though, hopeful for the future of humanity if we who want a future work together to build one from the ashes of what was.

3 Ways to Make Money Off The Coming Years of Market Volatility

To begin: I am not telling you what to do. I am not responsible for any action you take. I am telling you what I do. If you choose to do the same thing, that is your decision. I am not responsible for your decisions.

Economic cycles ensure a rise and fall in the overall stock market. Timing these is pointless. You will have almost 0% chance of catching the bottom or calling the top of the market. Yet, if you set yourself price-points at which to take action, you can achieve powerful returns without too much stress. Buying the market when it is on sale, then selling it when it’s above where it belongs, is profitable.

A simple set of strategies exists to wait for the market to hit a price-point at which you are comfortable to own a piece of its growth, and to sell a piece of its future loss. You don’t have to do both things. Doing both can try your patience beyond any comfort level. Doing one alone (buying for the rise) can be thrilling. Doing both can accentuate returns.

I’ll walk you through different options from the easiest to the most stressful. You are invited to ignore any of these or find the option which works best for you. Again, I’m not telling you what to do, I’m telling you what I have done, and will be doing in the future because it works for me.

Option 1 – Easy on the Heart

This is the simplest way to profit off market volatility: Regularly buy a Total Stock Market Fund (e.g. VTI Vanguard Total Stock Market Index). If you set-up an automatic purchase of this fund, say on a monthly basis, you’ll own a piece of the total stock market in the United States. In this way, when the price of the market goes up, you just keep buying it. When the price of the market goes down, you just keep buying it (and get more of it!).

                Here is a set of scenarios to draw this out for you:

1.      You invest $1,000 a month in VTI. It is currently trading at $299, so that gives you around 3.3 shares this month. The price stays the same. You keep buying every month. At the end of the year you have 40+ shares on your $12,000.

2.      You invest $1000 a month in VTI. It is currently trading at $299, so that gives you around 3.3 shares this month. Next month the price drops by 30% to $209, which allows you to buy 4.78 shares. (Notice, you would get more shares because the price of the share is on sale. Yeah!!!) The price stays down for the remainder of the year. You are able to own 55 shares by the end of 1 year. (Buying something on sale is great for long-term ownership and you did nothing different to earn these extra shares.)

3.      You invest $1000 a month in VTI. It is currently trading at $299, so that gives you around 3.3 shares this month. Next month the price skyrockets 30% to $388, which allows you to buy around 2.5 shares. Since the price went up, the fund is selling at a premium, so you can buy fewer shares with the same regular investment.

 

Over the course of several years you will see the market fall and rise. You simply keep buying, which allows you to buy the discounts. This takes no thought on your part, creates no stress, and is the simplest way to build long-term wealth. Keep this up for as long as you invest, and live comfortably when you are done. Simple and stress free.

Option 2 – Buy the discounts, hold the falls.

This is an option for someone who can take a little volatility, but would prefer not to take too much risk. In this case one holds a money market fund, cash, or a simple bond fund (e.g. VND Vanguard Total Bond Market Fund) while you wait for a discount opportunity to arise. You watch UPRO (Pro Shares UltraPro S&P 500 ETF) regularly, waiting for it to go on sale. It will go on sale.

Note: UPRO is an exchange traded fund which returns 3X the market growth for a day. Every day the fund goes up, or down, by 3X of the market. As the market is a constantly rising machine over the long-term (think 20 year periods) this fund will always come out up, by 3X from the market as a whole.

The price of UPRO has ranged, in my investing career, from $1 to its current $96. During an economic downturn it falls below $30, and occasionally has gone all the way back down to $14.

In this option, simply mark a point at which you are comfortable, probably between $10 - $30 at which you would like to buy this fund. Then, you sit. You sit. And, you sit. In time the fund will rise, going above $70. In the range between $70 - $85 you start to sell off your holdings, moving your money back into a more conservative investment.

Rinse, and repeat over the course of 30 years and you’ll find you’ve earned a lot on market growth.

 

Option 3 – Buy the discounts, short the peaks.

This option is for those with hearts of steel, nerves which don’t feel, and the patience of a bear in hibernation. I do not recommend this option to anyone. I have done this once and it almost caused me a heart attack. This is what I did:

In 2017 I knew the United States would struggle economically from a decision by its then President. I was not sure what specifically that decision would be, but knowing his way of making decisions, I knew he'd make some bad ones. At the time I speculated (note: this is not an investment) approx. 30% of my net worth in the SPXU ProShares UltraPro Short S&P500  

In 2020 this speculation paid off. I then switched it to UPRO ProShares UltraPro S&P500 which also paid off. I sold this back in 2022.

The idea here is that you short the market when it is selling at a premium before buying the market back when its selling at a discount. To do this, one must set a strategy ahead of time and stick with that strategy. There will be times when the nerves fray, the patience wanes, and anxiety rises to a fever pitch. Stick with the strategy and you’ll make it through. Second guess yourself, and you’ll lose everything.

A scenario which works:

When UPRO is trading above $85 begin buying SPXU. Convert 10% of your portfolio of UPRO to SPXU every week until you’re 100% in SPXU. This should take 10 weeks. Then, SIT! SIT! Go on holiday. Go away. The market will go down by a lot eventually. It always does. It will take longer than you expect. It will be uncomfortable. Don’t look at your losses as you short a market you know will eventually fall. It will eventually fall.

During the fall, UPRO will hit $30, and may begin going below that. Begin converting back into UPRO at 25% a week. This will take 4 weeks. Now, SIT! SIT! Wait for UPRO to go back above $85 again.

Rinse and Repeat. Each time you start over, take 50% of the new funds off the table, putting them back into something like VND. This is your DON’T TOUCH THIS POT, which as the name implies, is your long-term nest-egg. Never put this money into play again, as it is your winnings. This will be your dividend income pot for the future.

This option shorted the market when the price was high and bought when the price was discounted. There was no attempt to time the high or low, but simply take advantage of the sale which was being offered.

 

Learning

We can run away from facts for a time, but facts have a way of catching up eventually. Markets rise and fall. If you know that, and know yourself, then you can use who you are to benefit from those fluctuations. Know your level of risk tolerance and patience. At the right level for you there are options on how you can ride the market up, own a lot of it, and ride it down again, buying more of it when it goes on sale.