MW We told you in January how to Trump-proof your portfolio - you can still do it

By Brett Arends

A simple way to shelter your investments for the next few years

When I wrote in January about how to "Trump-proof your portfolio," I had my tongue - not for the first time - somewhat in my cheek.

I pointed out that anyone who wanted to sit out the second Trump administration had the option of parking all their money in U.S. inflation-protected Treasury bonds 912810FH69 that would mature in April 2029. That would keep their money safe against inflation, stagflation, stock-market turbulence and pretty much anything else for just over four years - until either a few months after Donald Trump had left office or, conceivably, a few months after he had been sworn in for his third term by Chief Justice Lauren Boebert.

Well, here we are 10 turbulent, eventful, MAGAful weeks later and I have to say: My suggestion isn't looking terrible.

So far those bonds have earned you 2% in less than three months, which works out at an annualized rate of more than 10%. Not bad for a risk-free investment.

Meanwhile, going into Trump's tariff "liberation day," the S&P 500 SPX was down 5% this year and the "Magnificent Seven" MAGS, stocks which were last year's can't-lose investment assets, were down 17%.

And this is before we factor in the commotion following the news of the latest tariffs.

Naturally it's early days. You can't measure an investment portfolio's performance by a few months, or even by a couple of years.

But, to cut to the chase, if you really want to shelter your money from turmoil for the coming years it's still hard to see a better or simpler option than short-term TIPS bonds, which are guaranteed by the U.S. government and whose principal value will rise to match the consumer-price index. For normal people, who have no interest in buying individual bonds, the simplest approach would be to buy a low-cost fund that owns short-term TIPS bonds such as the Vanguard Short-Term Inflation-Protected Securities ETF VTIP, or the iShares 0-5 Year TIPS Bond ETF STIP.

Meanwhile the further the stock market falls, the more appealing it looks. For instance, if the S&P 500 falls 40%, that would take its price-to-earnings ratio down from 20 times forecast earnings to just 12 times forecast earnings, the average for stocks held by the iShares MSCI Emerging Markets ETF EEM.

That said, if you "Trump-proofed" your portfolio in January you could - if you wanted - swap back into stocks now and purchase 7% more units of the SPDR S&P 500 ETF SPY than you could have done back then.

Anyone who says with any certainty what is going to happen next is lying to you.

Speaking late Wednesday afternoon, Treasury Secretary Scott Bessent dismissed the latest upheaval, telling Bloomberg TV that the markets and our retirement portfolios have "a Mag Seven problem, not a MAGA problem." His argument: U.S. stocks have been falling this year because of the troubles facing the Magnificent Seven big technology stocks, which have been falling since China unveiled its low-cost DeepSeek AI chatbot in January.

Why this would undermine valuations of other stocks is another question. The Russell 2000 RUT index of small U.S. companies was down 11% so far under the Trump administration - before the liberation day announcement.

But if you think the stock market might not just have a Mag Seven problem, but might also have a MAGA problem, there are always TIPS.

-Brett Arends

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April 03, 2025 06:00 ET (10:00 GMT)

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