Assumptions with VT
Resume IA
Le post analyse les hypothèses sous-jacentes à l'investissement dans l'ETF VT et interroge sa pertinence en cas de dissolution de l'OTAN ou d'instabilité géopolitique
Conseil cle
Diversifier son portefeuille et considérer les risques géopolitiques lors de l'investissement
If NATO is dissolved, does it affect how we invest? This is a question I had and I came across this: Implicit assumptions baked into VT VT assumes: 1. Open global trade 2. Stable security alliances 3. Capital mobility 4. Low probability of prolonged conflict 5. Markets efficiently reprice risk A world without NATO violates all five assumptions simultaneously. What do you think? Does index investing based on market cap make sense in this “new” world if assumptions are no longer relevant? Edit: I should clarify that I used NATO but should say EU. I am not saying I know more than markets but more for understanding of dynamics. Indexing was created around 1976 post ww2. As most of us out of life savings into indexing, want to be sure VT still a relevant investment strategy should things change where there’s more instability and geopolitical risks.
“The assumption with VT is that no matter what happens, you have the entire global equities market covered. That's it. You catch all the winners and all the losers, and bank on the worldwide line continuing an upward ascent.”