How We Ended Up Here ππ
Western economies, especially the USA, still spend, act, and price themselves as if they control the majority of the world’s economy. But that's no longer true! π
Twenty or thirty years ago, almost all key products, technologies, and innovations were coming from the West. Fast forward to today: with the rise of Asia and parts of the Middle East, that reality has shifted. π―π
Now, Asian companies compete head-to-head in every sector. Yet, US companies are still priced as if there's no competition — and that they can continue to grow forever. π
Reality check: The US stock market is massively overpriced! ππ§¨
Let's Look at the Numbers ππ
Take the Price-to-Earnings (PE) ratio for key US indices like the S&P 500 and NASDAQ.
In a normal market, a PE of 10–13 is healthy, meaning if you invest, you expect about a 10% return through dividends.
A PE for USA indexes is 30, which means your expected dividend return would be around 3% — and the actual dividend yield for S&P and NASDAQ is closer to 1%. π³
You might argue: "But these companies are growing fast and their profit will soon be much higher!" π
Sure, they are growing — but can they double again and again, especially with rising global competition? I seriously doubt it. π
The USA Is No Longer the Tech King! ππ»
Historically, US tech giants grew fast and a PE of 20 was fine, because you knew they’d double profits in several years.
Today? Things have changed.
For example:
- Huawei developed HarmonyOS, installed on 1 billion devices, competing with iOS and Android! π±
- Yes, the USA launched ChatGPT, but China quickly answered with DeepSeek! π€
- Tesla vs BYD, YouTube vs TikTok... The competition is fierce everywhere! βοΈ
Given all mentioned and the rising debt burden on US citizens and the government, which can leed to cuting spending, betting on massive growth for American tech companies looks unrealistic. π΅π«
US Companies Are Driven More by Hype Than by Results π’π’
So why are people still ready to pay for USA companies more?
One major reason for this hype is. There's a massive demand for US stocks from both retail investors and institutions, including pension funds. π¦π
It’s understandable: everyone talks about the "legendary" 10% US market historical returns. People trust in names like Apple, Tesla, etc. Even Warren Buffett promotes index investing — yet his company, Berkshire Hathaway, is sitting on $300 billion in cash, not pouring it into US indices. π€, interesting why?
This all keeps demand for US stocks high, which is driving share prices, yet the outlook is not that promising!
In my opinion, around 30% of US companies' value is added by hype but not by actual results.
And all of this made the US stock market extremely sensitive to tweeets, rumors, and social media drama.
A good example is recent Tariff wars, European indexes where PE is around 15-20, volatility was significantly lower!
With Trump in the office, we’re looking at four more years of pure rollercoaster volatility. π’
Especially since Trump openly says his friends made billions from market swings, and his son profits from crypto hype, so he thinks it good thing! ππͺ
How to Save Your Nerves (and Your Money) πβοΈπ°
I’m not predicting a market crash or the end of the USA’s dominance — America still leads in innovation and global influence, for now. β¨
But with such sensitivity to rumors and tweets, you can no longer estimate market movements, thus you cannot asses the risk and thus, it’s hard to invest wisely. β
Therefore, I choose to invest in smaller, less speculative, and simpler assets where the risks are much clearer and manageable!
The Best Investment Strategy for the Trump Era! ππ‘
Personally, I’m focusing on:
- Local businesses
- Medium-scale renewable energy projects
- Rental properties
- And some time on startups
These assets:
- They aren’t traded publicly, so no overvaluation and wild swings based on a tweet π±β‘οΈπ.
- Usually, these projects offer fixed or predictable returns π
- Allow diversification with low minimum investments (as low as €100 or less) π±
Want to Learn More? ππ
If you want to learn how to invest in:
- Early-stage startups π‘
- Green energy projects πΏ
- Real estate ποΈ
- Local businesses πͺ
π Subscribe to our YouTube channel and visit crowdinform.com! π₯π