TARIFFS HAVE HALTED THE 'BUY AMERICA' ERA.HERE'S WHAT TO DO NEXT

“If you’d come to me 10 years ago, I would have said, ‘Just buy an index fund and don’t worry about it,’” says Stephanie Guild, chief investment officer of Robinhood Markets.

- BY JEFF JOHN ROBERTS

FOR THE PAST decade or so, it was easy for the average investor to pursue a winning strategy: Load up on low-cost ETFs that tracked the S&P 500 or another big basket of U.S. stocks, then sit back and watch the returns pile up. This strategy became even more appealing as the U.S. tech sector roared and the stock prices of “the Magnificent Seven” climbed to nosebleed heights. This approach, or variations on it, came to be known as Buy America, and it worked splendidly. Until it didn’t.

Now she suggests investors consider a more active approach to their portfolios—and give them a lot more geographic variety.

Many investors came to a similar conclusion in April after President Trump announced his “Liberation Day” tariffs, which signaled that his administration would pursue his goal of expanding the manufacturing sector, even if it incurred near-term damage to a U.S. economy that had been the envy of the world since the Great Financial Crisis. The market response was immediate. The punishing tariff measures not only sent stocks tumbling but also triggered a decline in the value of the dollar and U.S. Treasury bonds. Meanwhile, a flood of capital began to head overseas, leading some to invoke a new investment mantra: Sell America.

That advice is likely overstated, especially as some markets have recovered from the shock of the initial April tariffs. But the recent “Sell America” cries can also be seen as an exclamation point on a broader trend. According to many investment experts, it’s been apparent for some time that the lopsided weighting of tech stocks in many portfolios was not sustainable. And many casual investors may be unaware they’ve built up an oversize helping of Big Tech. Most index funds are asset-weighted, which means that the bigger the Magnificent Seven grew in market valuation, the more space in a set-it-and-forget-it portfolio they came to occupy.