Hedge-fund titan John Paulson’s firm has suffered massive losses despite his proximity to President Donald Trump as a key adviser.
Paulson, 61, was one of the first people on Wall Street to back Trump's bid for the presidency. He counseled Trump on economic matters during the campaign. He gave $250,000 to Trump's inaugural committee.
Paulson’s “investors are unlikely to be impressed by his political access. His firm, Paulson & Company, has recorded nearly double-digit losses in several of its larger funds as of the end of March,” the New York Times reported.
“That dismal record is a far cry from nearly a decade ago, when Mr. Paulson made nearly $15 billion betting on the collapse of the housing market. Back then, state pension funds and investors around the world rushed to give him their money to manage. Even Mr. Trump became an investor with Mr. Paulson — and eventually lost money,” the Times reported.
“Mr. Paulson's struggles come after a gut-wrenching 2016, when he recorded even steeper losses in those funds, partly because of several wrong-footed bets on drug makers, including the troubled Valeant Pharmaceuticals. That followed a painful 2015, when investors first balked and began pulling their money from his firm,” the Times reported.
A representative of Paulson declined a request for an interview with him. His funds are said to have performed better in April, said a person with knowledge of the firm who spoke on the condition of anonymity, the Times reported.
For his part, Vanguard Group’s Jack Bogle warns investors to “be realistic” when trying to wager financial bets amid such political and economic uncertainty under President Donald Trump.
And the index-investing pioneer also warns that investors should always be prepared for the market to fall by as much as 20% to 30% — or even more.
“It’s hard for me to figure out how this period stands out in an awful lot of good ways,” Bogle told MarketWatch.
“What the markets seems to be telling us here in the U.S. is that there are a few bullish things going on with the new administration, which is determined to borrow a lot of money to spend a lot of money,” said Bogle, the founder of the Vanguard Group, the world’s largest provider of mutual funds with $4 trillion in global assets under management.
The 87-year-old is also waiting to see how Trump’s touted tax-reform plan turns out.
“My feeling is that anything that increases the gap in wealth in the U.S. is bad for our society and bad for markets. Anything that increases racial division here is bad for our economy,” he said
“So we’re having a battle between the short run and the long run. The short run is bullish, the long run more bearish.”
Investors should expect annual returns of around 4% for equities, he said. For bonds, returns could be even lower.
“We are not going to have Nirvana. We are going to have — I’m quite sure — profits and returns on stocks and bonds over the next decade. But they will be low,” he said.
(Newsmax wire services contributed to this report).
© 2026 Newsmax Finance. All rights reserved.