Why the Stock Market Might Be Falling on Purpose — And What It Means for Beginner Investors

by Julian

Jun 21, 2025

Why is the stock market dipping sharply while long-term bond ETFs are suddenly surging? Could it be part of a deliberate strategy? Let’s break down a compelling (and slightly conspiratorial) theory that may help beginner investors understand short-term market chaos — and how to stick to smart, long-term investing strategies despite the noise.

🧠 Key Takeaway for Beginner Investors

Even when market news seems driven by politics or panic, sticking to long-term investing principles and diversified assets like the best ETFs for 2025 can help you stay steady and smart with your money.

The Theory: Market Volatility as a Debt Strategy

The U.S. Faces Massive Short-Term Debt Obligations

Over $7 trillion in short-term U.S. government debt is due within six months.
The government must either repay this or refinance it.
But refinancing is expensive when interest rates (like the 10-year Treasury yield) are high.

How Lower Interest Rates Help

Lower interest rates reduce the cost of refinancing.
To push rates down, money needs to flow into safe assets like bonds.
When investors flee stocks out of fear, they often buy bonds — driving bond prices up and interest rates down.

The Suspected Play: Create Fear, Lower Rates

Could This Be Intentional?

Some analysts suggest a strategy:

Use political events (like trade wars) to trigger market fear.
Fear drives investors out of stocks and into bonds.
Bond demand rises → bond yields fall → government borrows at a lower cost.

This theory isn’t official policy — but it's surprisingly plausible.

Recent Market Moves Support the Story

What’s Happening:

Major stock indexes (like NASDAQ) fell after new trade war rhetoric.
Long-term U.S. bond ETFs like TLT surged in price — a clear sign investors are moving into bonds.
Interest rates on 10-year Treasuries dropped significantly, lowering refinancing costs for the government.

What This Means for Long-Term Investors

Don’t Get Distracted by Headlines

Political drama and economic maneuvers may shake the market in the short term — but for beginner investors, here’s what matters:

✅ Focus on the Fundamentals

Invest in low-cost index funds or top ETFs for 2025
Stick to a long-term investing plan
Avoid trying to “time the market”

📈 Use Volatility as an Opportunity

Down markets = potential discounts on quality investments
If you're investing for the next 10–30 years, short-term dips can work in your favor

🛡 Diversify Your Portfolio

Include a mix of stocks, bonds, and international assets
Consider ETFs with broad exposure across sectors or countries

Best Beginner Investing Tips (2025 Edition)

Here are some timeless principles:

1. Start Early, Even with Small Amounts

Thanks to compounding, time matters more than timing.

2. Invest Regularly

Use dollar-cost averaging to reduce the risk of buying at market highs.

3. Use Tax-Advantaged Accounts

Think IRAs or 401(k)s (or local equivalents) to boost after-tax returns.

4. Choose Simple, Low-Fee ETFs

Look into ETFs like:

VTI (Total U.S. Stock Market)
VOO (S&P 500)
VXUS (International Markets)
TLT (Long-Term Bonds, if seeking diversification)

5. Stay Calm During Market Drops

Downturns are part of the game — successful investors stay the course.

Final Thoughts: Ignore the Noise, Trust the Process

Whether or not the market dip is part of a political strategy, one thing remains clear: trying to outguess short-term moves is a losing game. For beginner investors, the best approach is to: