Published 2025-02-25.
Time to read: 2 minutes.
The return of the President Who Must Not Be Named has introduced chaos throughout the world. In order to survive, people must quickly recognize and adapt to times of great uncertainty and change. Tried-and-true modes of behavior and conventional wisdom might be a liability until relative stability has been regained.
"Yo-yo" is a slang term for a very volatile market. The name comes from the movements of a yo-yo toy; in a yo-yo market, security prices continually go up and down.
A yo-yo market has no distinguishing features of either an up or down market—rather, it exhibits characteristics of both. Security prices in a yo-yo market may swing from very high to reach a low point over a given period of time, making it difficult for buy and hold investors to profit.
While it is difficult for buy and hold investors to profit in a yo-yo market, they can be profitable environments for astute traders who are able to recognize buy and sell points and make trades before the market reverses.
The occurrence of yo-yo markets is rare, especially those that last for several days or more.
Today, as I write this, it seems that the US is being dismantled from within, and that there is no effective leadership that will arise to oppose the destruction. On a larger scale, the global power structure and financial systems are facing existantial threats.
This is not a time for business as usual. We must deal with reality as it presents itself, and be prepared for much worse to come.
Buy and Hold
The strategy of long-term investing (“Buy and Hold”) is inappropriate right now. 20-year US Treasury bills (T-Bills) are bouncing up and down 3% every week. This is not normal.
