To The Moon

The "Stone Age" Fallout: Vanguard VT ETF is My Global Anchor

🌟🌟🌟 The "Peace Rally" of earlier this week has officially been replaced by a "Stone Age" reality check.  After Trump's prime address on Wednesday night where he claimed military goals were nearly met but vowed to hit Iran extremely hard for another 2 to 3 weeks to "finish the job", global markets took a beating.

The Stone Age Fallout 

Oil's Vertical Climb

Brent Crude futures surged over 6% to USD 107.49, while US WTI jumped more than 10% to top USD 111 per barrel.  This price spike was triggered by Trump's renewed threats to hit Iranian infrastructure and his lack of clear plan to reopen the Strait of Hormuz.

Stocks in Retreat 

The optimism that fueled nearly 3% gain in the S&P500 on Tuesday has evaporated.  Following the speech, US stock futures tumbled, with the Nasdaq 100 dropping over 2% as investors braced for a prolonged conflict and higher for longer inflation.

Will Oil Set New Highs?

Analysts at TD Securities suggest that if the Strait of Hormuz remains closed, onshore in entities could fall to multi year lows, putting increasing upward pressure on oil prices through the 2nd quarter.  Some technical projections even point toward potential levels of USD 135 to USD 157 if the USD 118 resistance is breached.

Buy the Dip or Stay in the Bunker?

Analysts are currently split on whether this is a buying opportunity or a falling knife. 

The "Pass" Case :  Many analysts maintain a cautious outlook, noting that the market is starting to resist Trump's changing rhetoric after being wrong footed several times.

The "Buy" Case:  Some contrarians argue that energy stocks like Exxon Mobil $Exxon Mobil(XOM)$  and Chevron have not risen as much as crude oil prices, leaving untapped upside for those willing to brave the volatility.

My Strategy : $Vanguard Total World Stock ETF(VT)$ 

I am staying invested in the stock market and my Top Pick is Vanguard Total World Stock ETF or VT.  It is a great set and forget strategy and the ultimate global anchor. 

Why?

Huge Diversification :  VT holds over 10,000 stocks.  So if one region is stone aged, you have 9,999 others doing the heavy lifting.  VT also provides instant diversification across large, mid and small cap stocks in both developed and emerging markets globally.

Low Cost : 0.06%

Top Holdings:  You are backed by the biggest tech titans like the Magnificent 7 $NVIDIA(NVDA)$  $Apple(AAPL)$  and $Microsoft(MSFT)$ .

Performance : VT long term annualised return is historically around 8 to 9% per year.

Dividend Yield : 1.82%.

Analyst Outlook :  Some analysts see immediate resistance at USD 142.78 but highlight strong support at USD 139.52.

Concluding Thoughts : Don't Bet Against the World

At the end of the day, geopolitical drama is the price we pay for long term compounding of human ingenuity. While the headlines focus on the "Stone Age", the world's 10,000 largest companies are already busy building the future.

As the legendary John Bogle, the father of index investing once said:

"Time is your friend.  Impulse is your enemy.  Take advantage of compound interest and help yourself to the returns of the stock market.  Keep a steady course."

So let the oil spike and the rhetoric fly.  I am staying the course and let the 10,000 strong army of VT do the heavy lifting for me. 

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