What matters

The TACO trade resumed on this week, reinforcing two cardinal rules.

• Never bet against America.
• Always hedge against Trump.

The Trump-Always-Chickens-Out scenario was in full flower yesterday during the president’s afternoon presser in Florida, then again on social media. The war is pretty much over, he said. It could, maybe, probably end soon.

So stocks went up. Oil went down, back below $90 a barrel, even as the Secretary of War said the relentless bombing and destruction of Iran would continue until morale there improves.

It’s confused. Confusing. A war of choice without a fixed goal and a fluid timeline. Meanwhile the US continues to shoot down $20,000 Iranian drones with $4 million Patriots while it loses allies, admiration and the world’s patience. At the end of it all, odds are the Iranian regime will hold and America will have spent maybe a quarter of a trillion dollars on this escapade.

Pure TACO. When oil hit almost $120 Sunday night and the Dow on Monday was shedding 900 points, it was too much for Trump. Most Americans (60%) think this is a stupid war, and every day draws the US closer to the midterm elections. Plus there are now dead soldiers coming home – and the Iranians, unlike the Venezuelans – did not fold like a cheap suit after being carpet bombed.

Nobody knows what comes next. But the chances of Trump buckling down to finish the job of finishing off Iran are slim. Mr. Market decided yesterday it was over. Armageddon, a global energy crisis and widespread famine caused by the disruption can wait for another day. Maybe then new Ayatollah guy won’t be so bad. If he is, the next president can blow him up.

All this underscores some truths about investing. About what we should do when faced with headlines suggesting you have 24 hours (at best) left to live.

First, go for a walk. Take the dog. She doesn’t care.

Second, don’t change a thing in your portfolio if you have it balanced and diversified. Stick with ETFs pacing major markets, rather than individual stocks. Way less risk. Be global, with thirds in the US, Canada and international. Bay Street, for example, outpaced Wall Street last year. And Korea did even better. Stay balanced, with 40% in safer alternative stuff, like bonds, preferreds or REITs which throw off income while counterweighting growth assets. Of course, load up the tax shelters, like RRSPs, TFSAs, FHSAs and RESPs. These are gifts. Do not squander.

Third, don’t be afraid, either. Even Trump has guardrails – and we now know what they are. There’s no need to go to cash, for example, beyond the normal small amount in a B&D portfolio. Besides, all those holdings are liquid.

This means, fourth, stop listening to the Cassandras who populate your newsfeed and breed inside your algo. AI geniuses will tell you to put 15% or more of your net worth into gold, or maintain up to five years of routine income requirements in cash. But bullion is also a volatile and quixotic asset which pays no interest and produces no dividends. If you own an ETF holing the largest companies on Bay Street, you already have precious metals exposure through the gold miners – who also pay dividends. As for five years’ worth of cash, this is not 1914. It’s not 1939. It’s TACO time.

Finally, never, ever forget why you’re investing, saving, planning and working. Life goals include getting married, raising your kids, getting a house, starting a business, financing uni and ensuring you can retire in dignity and peace. Those long-term milestones endure, unaltered by the chaotic, mesmerizing swirl of current events. Fifteen years from now Trump won’t be here. Iran will. And your life’s priorities will remain – so focus on them.

These are the days when perspective is easily lost. But that’s your choice.

About the picture: “The dogs here in Rajasthan, India range from fairly healthy to the extreme end of the scale,” writes Robin, normally at home on Vancouver Island. “The locals do attempt to leave water out in some areas, and this pup was fortunate to know where to go for a drink in Udaipur.  Thanks for all you do.  I manage to read your blog daily from everywhere I travel.  Much appreciated.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/03/10/what-matters-6/