Comment and opinion for retail investors in the UK
(about 2500 words, 13 minutes or less estimated read time)
I have commented before that September and October are statistically volatile months for equity market investors, so I thought you might want to have some prompts looking at the risks and opportunities that are present or on the horizon as we head into Autumn. The next few headings cover a few of topics that have been worrying me, so to be honest I am not going to be dwelling much on opportunities!
(published early as I am having a minor operation on April 1st)
I have written earlier this year that the main geopolitical risks were Trump, Trump and Trump and the conduct of the Israeli/ American war with Iran has been such as to make even the most experienced independent ‘talking head’ whether a political, diplomatic or military commentator admit that they cannot detect any strategic plan, understand the USA’s actual objectives or even believe that what the President writes on Truth Social even amounts to the policy of anyone other than the man himself at that very moment in whatever mental state he happens to be and with whatever most recent influences have fed his brain.
This is a state of affairs that seems almost beyond belief but I think that some news organisations either have not grasped the reality, or feel that that they should not risk suggesting anything is other than normal and that the US Secretary of State really travels the world with a real idea of what US policy on conducting the war will be tomorrow morning. I imagine that he actually finds out what policy he is supposed to defend by reading Truth Social when he wakes up.
I could write many thousands of words telling you what I think is really happening and why, but that is not the purpose of this blog. Investors are interested in the likely consequences of this state of affairs in terms of asset values in the near term and also beyond that. Here are my observations on that topic. I do have to touch a little on the actual events but will do my best to stick to facts as opposed to opinions about what will happen next in the Middle East.
This article will as promised attempt to assess some probable consequences for investors of the US and Israeli attacks on Iran.
Given that I was a teenager, just into working life, when the Yom Kippur War of late 1973 kicked off, it is no surprise that it is firmly printed in my memory. I specifically recall buying petrol for my 50cc moped with a ration book! That time period has plenty in common with what might be developing now, although it must immediately be noted that there have been some distinct structural changes in the global economy over the more than half century that has elapsed, more of which later.
As a starting point let’s take advantage of AI to get a summary of what happened then. Here is text from MS CoPilot, lightly edited by me.
I did not have a specific subject lined up for a Deep Dive article this month and this weekend’s events in the Middle East are significant enough for me to think that I would be offering more help to readers by commenting objectively and calmly on the implications for portfolios of the US/Israeli attack on Iran and the emerging military and other consequences, especially the type and scope of retaliation and the actions of other global powers.
Some of what might be coming for economies and markets will be no surprtise for those of us old enough to remember the early 1970’s, I suspect, but the world is at least a little different – plus the starting point is inverted in terms of who attacked who.
I don’t think it would be useful to offer any instant analysis when we have so little to go on, seriously concerning though it is. I will allow a few days of events to accumulate before offering my thoughts in any detail.
Whatever, investors globally will tomorrow be acting to deal with hugely worsening risks to growth and inflation. Expect to see a lot of volatility!
Any subscriber with specific questions can comment on this post or email me direct.
As I explained in my email at the end of last year, my plan for 2026 is to post a detailed Deep Dive article as previously at the start of the month and then add another post, which will be of whatever content I think might be useful to readers, in the middle of the month. As always, I can research and write a piece on request, if any reader wants me to.
In terms of word count and read time, the longer article will be about 2500 words with a 10 to 15 minute reading time required (and perhaps complex enough to require a second look over!) and the mid-month pieces about 1000 words and only 5 minutes demanded!
This month, I have been thinking about the markets which I have a less concrete or confident opinion about. I am pretty sure that it makes sense to invest less in the USA and more in Europe and the UK and I don’t see merit in spending time on the Japanese market, so that leads me to focus on the Asia Pacific ex-Japan region and on Emerging Markets, which two sectors would have quite an overlap in a Venn diagram.
[Read more…] about Mid-Month Musings