A Cool Calm Consideration
6 April 2026
To all Financial Friends
Uncertain and turbulent times. Referring to recent commentaries on the website, we are reminded that on the 27th February it was good news! Our public finances would need to borrow less money to pay the countries bills, interest rates and inflation would fall! One day later, 28th February and 'war' broke out with Trump and Netanyahu (USA and Israel) in conflict with Iran. Suddenly, inflation and interest rates will rise. Dramatic headlines hit the papers. Stock market battered and routed! Really?
Indeed the outlook is troubling with the Iranian Strait of Hormuz restricting vital energy supplies across the world. Trump threatening to destroy Iran's energy infrastructure and the Houthi's threat to hinder further energy supplies through maritime chokepoints along the Red Sea, are all significant issues.
Commentaries that you read in the financial press or here are not advice. Commentaries seek to provide accurate information and offer comparative insights. Our commentaries clarify and make you aware of your options and choices. What you could do, not what you should do. Information and guidance allows you to come to your own conclusions.
So what has happened in real life, right now, with our students investments? As the figures below show, except for consumer staple stocks, every investment category has tumbled in the month to 31st March. Yet returns over 12 months to 31st March have made students significantly wealthier beating by far the rising cost of living.
Indeed, during the month of March, consumer staples rose by +7.86%, Gold fell by a staggering 24.99% and across the board other assets fell between -11.67% to -2.09% yet even after allowing these falling values your 12 month returns to date have been exceptionally good.
Ignore the outstanding gain of 101.15% in the last 12 months in Gold and Silver (after allowing for the fall in March) if you can. Then the specific assets highlighted in our previous commentaries show returns between +9.02% and +41.99% across just the last 12 months also. So past performance is nothing to worry about and rather to applaud!
Investments fall as well as rise. Here is what has happened over the last war torn month to 31st March.
Specific Assets Highlighted in Our Commentaries
1 Month 1 Year
Consumer Staples +7.86% +11.07
Global Infrastructure -2.09% +14.89%
UK Infrastructure -5.02% +9.02%
FTSE 100 -6.11% +23.00%
Gold and Silver -24.99% +101.15%
Global Technology -11.67% +34.30%
Defence ETF -6.67% +41.99%
Funds Held by Some Students
American Equities -7.29% -4.86%
UK Equities -8.35% -8.35%
Global Equity -4.24% +16.31%
Natural Resources -2.51% +61.02
Fixed Interest / The Bond Market
Index Linked Gilts -3.87% +3.49%
UK Gilts -3.15% +2.6%
Corporate Bond -4.46% +2.79%
*60/40 Traditional -3.97% +2.74%
Mixed Asset Fund -4.46% +5.44%
*The 60/40 model is a strategy recommended by large numbers of advisers. The 60/40 model agrees with regulatory expectations that advisers will recommend diversification. Mixed asset funds, providing diversification are also commonly used. The 60/40 model means investing 60% of funds in equities and 40% in Fixed Interest/Bond markets. Specific assets carry higher risk of loss but can provide higher returns as shown in just this 12 month period of global uncertainty. Once again bonds (supposed to be a safety net when equities fall) fell with equities. All important negative correlation failed to protect investors.
So, Has the Stock Market ‘Crashed?'
Absolutely not. A so called stock market crash is defined by a typical decline of 20% or more from previous high levels. A 'pullback' is a relativley mild decline of 5% or less from previous high levels while a 'correction' is marked by declines of 10% or more. So at today's levels we are in 'pullback' tipping into 'correction' territory But what about a fall of 24.99% in our students favourite gold and silver fund?
Gold and Silver
Do I hear complaints from students who have more than doubled their money in the last 12 months? Not so far! This despite a loss of 24.99% during the month of March. So why has this loss happened? Firstly through profit taking, as several of our students have already done. Secondly because investors in gold go there for safety. When interest rates are predicted to rise on deposit accounts held in dollars this represents a safer return than holding gold.
On the 28th February Trump declared 'war' so we moved from an expectation of falling interest rates and inflation in the States to the high probability of inflation and interest rates rising in the States. So gold is sold for the safer return of a solid interest rate on deposit in the USA compared with the volatile risk of holding gold. Hence the dramatic one month fall in the value of gold and silver.
Is the Future Golden?
Even as I write, a new peace proposal has been put forward between the nations at war. Should this (or another attempt) succeed then the Strait of Hormuz will open, the oil will flow and markets should rise like Artemis II. After a period of considerable adjustment the global economy could settle back, interest rates and inflation fall, investors again seek safety and profit in gold? Notice the question mark please.
Investors in gold and silver may well seize more of their profits reducing holdings to more traditional levels. In normal times (which these of course are not) traditional advice would often be to hold perhaps 3%-5% of a portfolio in Gold.
This will depend on the investors outlook. If Trump lets 'all hell' loose at 1am UK time tonight then the global economy could be heading for recession. Should a cease fire and an end to war be announced then lets hold our breath. Our investments will likely emerge from the dark side into the sunlight of a more golden future.
Not Forgetting the Dear Old FTSE 100 Index
Formed on the 3rd January 1984 the Index is now over 42 years old and has proved remarkably resilient in these troubled times. Gaining +23% in the last 12 months after losing over -6% during the month, how does this happen? The UK's top 100 companies are domiciled in the UK but have wide and diversified investments held across the globe. Roughly 40% of the holdings in the FTSE 100 Index are linked to energy, commodities and strategic assets relevant to these times of economic stress and conflict.
Good news for our several students who invest monthly in the Index benefiting from the strategy of pound cost averaging. A strategy worth considering in these volatile uncertain times. The UK was measured by the FTSE 30 Index before January 1984.
Where Now for Your Money?
If you will read back over recent commentaries on our website you will see my reasoning for the use of specific assets. Defence, infrastructure, consumer staples, gold/silver, IA technology attract me for the reasons set forth in the recent past. The one year performance shown above is supportive and encouraging. Traditional advice is always for broad diversification, choosing specific assets carries more risk. Yet if the world has changed and so has the world of money, could it be that these assets will prove to carry more protection and profit than traditional thinking? Only time will tell.
Get in Touch
As always and ever, I encourage you to get in touch. The new threats to financial survival and the cost of living means that those with money need to protect it to preserve the purchasing power of what they have. For those with little money it is so important to build up savings profitably and prudently. Growing and protecting your monetary reserves to defend your security and current lifestyle matters now more than ever?
Talk things over with Rob? Book a time and date right here www.calendly.com/yourfinancialfriend
PLEASE NOTE: A financial or economic commentary like these, are written to explain, interpret or give an opinion on economic events and markets to help readers understand what’s happening and why it matters. Designed to help you make informed decisions of your own by making you aware of opportunities, risks and potential rewards in the market.
