By Greg Bartalos
As Israel and Iran launch missiles at each other, geopolitical risk is investors' main focus, but markets are surprisingly calm. Why is this the case? Barron's latest Guide to Wealth has some answers, including in comments shared by readers.
The guide focuses on how investors should balance their political convictions with sober-minded long-term planning. Jack Hough argues that "using politics to drive investment decisions is folly." A better strategy, he suggests, is to follow the money, more specifically, government spending.
The Chips Act, for example, was accompanied by a rally in semiconductor stocks and the Inflation Reduction Act saw gains for infrastructure stocks. According to Mark Haefele, chief investment officer for global wealth management at UBS, "Investing in free markets is out. Buying what the government is buying is in." Comments on Hough's story show many readers agree that pursuing a partisan investing approach isn't optimal:
William Mitchell: "To my eye, the best advice is to lower your expectations on returns. Do diversify if you aren't and collect some income on short duration while you can, but don't chase returns that the market is not offering. That is where most of us get in trouble."
R. Paul Drake: "One can find stocks with rock solid balance sheets, effective business models, and an ability to pay an ample growing dividend (above, say, 5%). I do that in REITs and energy, by knowing details."
Mickey Cashen: "Investing according to a 'theme' not directly related to company performance means you are very limited in your possible choices. I'm a disciple of Graham-Buffett value investing. I keep 14 stocks (no time to properly keep track of more) and have no idea of the CEO's outlook or the company's political donations. I know they have long-term decent growth rates compared to their P/Es, have durable competitive advantages, and low debt or the means to handle it."
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Smart ways to gain exposure to international markets. Amid this year's tariff drama, international stocks have dramatically outperformed U.S. equities. Given home country bias, the long outperformance of U.S. stocks, and simple inertia, U.S. investors often lack meaningful exposure to overseas markets. However, with U.S. stocks hitting new highs this year while sporting plump valuations, many investors are using trade uncertainty as a reason to lock in gains and redeploy capital to cheaper overseas markets. As part of Baron's Guide to Wealth, Andrew Welsch explains why this outperformance could last for years. Our readers shared these ideas and insights:
John Mooney: "The markets obviously concur with this at least this year. I really like IDV [the iShares International Select Dividend ETF]. It's an international stock dividend ETF with value tilt, European emphasis, low expense ratio and 5.5%-plus dividend. It adds nice international exposure to your U.S. investments."
John McGoldrick: "SCHY [ Schwab International Dividend Equity ETF] is all you need. Add a 10% allocation in your portfolio, check the reinvest box, and don't read this nonsense."
Terry Wilkens: "Even though the U.S. has outperformed for the past 12 years, Vanguard's Aliaga-Diaz says the more important question is, 'How likely is it to outperform for the next 10 years?' One of these years these folks will be right but they've been wrong so long that they've become 'the boy who cried wolf.'"
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How advisors can help retired clients to stop feeling guilty about spending. Despite owning large portfolios that provide more than enough financial firepower to support a comfortable retirement, some retired clients struggle with a scarcity mind-set. David Conti, a retirement coach at RetireMentors, recommends a number of ways advisors can help clients overcome this emotional block. He writes: "In today's uncertain financial landscape, the advisor's mission transcends spreadsheets -- it's about nurturing confidence." Readers had this to say:
Mike O.: "Guilt free retirement will be the reward for many years of toiling away. Whether I decide to splurge on a supersize tub of popcorn at the movie theater or sneak my own water bottle and candy in is my business. The best thing about being retired: It's like being a 5-year-old that gets away with most things but has money in the bank like an old geezer."
Ronald Saluga: "I don't think we should scrimp and save in retirement just so that our heirs can fly first class. Enjoying retirement especially in my 70s and 80s while my health holds out is a good reward for prior years of hard work and frugality. No reason to feel guilty."
Stephen Hope: "Nice line: 'Today is the tomorrow you spent your life working for' and here it is. I am fortunate to have a generous union pension after 35 years working hard. My Social Security is barely used and so goes to investments. We do travel extensively but have two pensions and two Social Security incomes. I don't really want to 'find' something else to buy. I have hobbies and travel. Good article though."
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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June 16, 2025 10:08 ET (14:08 GMT)
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