Calm Your Investing Life: Own a Bit of Everything

In these early days of the Trump administration, it has paid to hedge your bets.

The U.S. stock market has been troubled. For one day two weeks ago, the S&P 500 was consigned to the dubious territory that Wall Street calls a “correction,” meaning that stocks had fallen more than 10 percent from their peak. The market has climbed back a bit, but watching U.S. stocks struggle day by day is a recipe for indigestion.

Far better to take a broader and calmer view. Bonds, both domestic and foreign, have generally been holding steady. And a broad range of international stock markets have been doing much better than that.

In fact, for classic, diversified portfolios with roughly a 60-40 mix of stocks and bonds from around the world, it’s almost as though nothing has happened this year. My own global, diversified portfolio is up slightly in 2025, much like the Vanguard Target Retirement 2030 Fund, which has risen 1.1 percent in 2025, according to FactSet. Diversified global portfolio returns have been fairly steady, despite the tariffs and trade tensions emanating from Washington and cascading around the world.

In other circumstances, a tiny investment gain in the first three months of the year would be nothing to brag about. After all, my failure to embrace “American exceptionalism” and double down on the U.S. stock market has come at a substantial cost. Globally diversified returns have lagged those of the S&P 500 over the last two decades. The U.S. stock market benchmark has had an annualized total return of 10.4 percent over the last 20 years, several percentage points higher than standard globally diversified portfolios like mine. I’m not thrilled by that disparity.

Then again, the returns of globally diversified stock and bond portfolios have been much steadier than those of the U.S. stock market alone. I consider it a good trade-off.

Steadier returns are a balm when the world seems unhinged and the urge to flee the U.S. market is powerful, as, I’ll confess, it sometimes is for me these days.