February 2025 update ($1,037,272 -$533 or -0.1%)

↑ Emerging Markets Stock Index Fund is up by $1,176 or +0.8%

↑ Eurozone Stock Index Fund is up by $6,628 or +3.7%

↑ GBP is up to USD by 1.6% or $1,346 for my portfolio

↑ Additional investment savings $2,500

Total gains: $11,650

 

↓ US 500 Stock Index Fund is down by $3,755 or -0.8%

↓ Global Small Cap is down by $6,451 or -3.7%

↓Growth fund is down by $1,978 or -2.3%

Total losses: $12,183

 

I was talking to some American friend and colleagues a lot of people hoarding investment cash instead of investing it. They are largely following the trend following big American companies (13 of them hoarded over $1 trillion) – Berkshire Hathaway ($334 bn), Amazon ($104 bn), Alphabet ($96 bn), Meta ($78 bn), Microsoft ($71 bn), Apple ($53 bn), Nvidia ($43 bn), Tesla ($37 bn) etc. One of the reasons that S&P500 yield is 1.3% which is equivalent of COVID-19 pandemic times and almost lowest in the past 20 years. This is another way to say that stocks are overpriced.

This drives number of employers offering retirement cash balances accounts go up from 1,477 in 2001 to 25,000 employers in 2025. Around $1.2 trillion is held in cash there.

Smaller business (doctors, lawyers, real-estate developers and others) are siphoning cash as part of the private agreements to exempt the high earners from payroll and Medicare taxes.  They explain it that financial advisers recommend to contribute 15% of your income towards retirement and high earners easily exceed 401(k) limit of $23,500 per employee plus up to $46,500 in the employer matches and profit sharing for 2025. 

The cash balances bonanza became possible since 1996 when Congress eliminated the combined limit on the amount someone with both a pension and 401(k) type plan at the same employer could save. People typically roll this money into IRAs. The number of IRAs with balances over $5 million more than quadrupled to 35,000 from 2011 to 2025, the latest government data shows.

 

On the other hand, with the current market volatility there will be more opportunities, since market is down 10% from its all time high in February. The first concern here that the USA stocks aren’t cheap even today.

 

The second concern is that there will be possibly greater opportunities until the USA will balance the trade with the other countries. This will take some time, and more is required for effect of deregulation and the local manufacturing to pick up.

 

Lastly, there is uncertainty when the Congress will extend the 2017 (Trump) tax cuts. For now I am saving up monthly and wait-and-see mode.