Latest / Best of Business / Sam Dickie: Fisher Funds expert on how investors can prepare for geopolitical disruptions

Transcript

Sam Dickie: Fisher Funds expert on how investors can prepare for geopolitical disruptions · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from news Talk set be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:17
  Speaker 2: We've moved from tariff headline shockers and then we've moved
• 0:19
  Speaker 2: sadly into geopolitical headline shockers. How are global investors thinking
• 0:23
  Speaker 2: about this that thus far? How can they navigate this uncertainty?
• 0:26
  Speaker 2: We've got Sam Dickey from Fisher Funds with us to
• 0:28
  Speaker 2: explain this. Hey Sam, here, that's it going very well?
• 0:31
  Speaker 2: Thank you. So we're a week into this thing now
• 0:33
  Speaker 2: between Israel and Iran. How do you see the global
• 0:36
  Speaker 2: investors thinking about things? How are the asset markets and
• 0:38
  Speaker 2: the equities and bonds and commodities and stuff responding to this?
• 0:42
  Speaker 3: Yes, it's always awkward talking about a war or real
• 0:45
  Speaker 3: human tragedy through the lens of asset markets, and sadly,
• 0:48
  Speaker 3: geopolitical risk is something that you and I to regularly
• 0:52
  Speaker 3: talk about. So if we look at equity markets, currencies
• 0:56
  Speaker 3: and commodity prices since the attacks, the local stock market
• 0:59
  Speaker 3: of Tel Aviv, it fell initially, but it's now actually
• 1:02
  Speaker 3: up two percent since then. The Iranian stock market is
• 1:06
  Speaker 3: hard to get a beat on, as it's sanctioned by bloom,
• 1:08
  Speaker 3: but it's a little weaker. Globally, equities have been very resilient.
• 1:12
  Speaker 3: The only interesting thing I'd call out there is while US,
• 1:15
  Speaker 3: Ossie and New Zealand markets are near flat, Europe is
• 1:17
  Speaker 3: a decent amount weaker because it's more exposed to an
• 1:20
  Speaker 3: oil price shock as it relies more heavily on imported oil,
• 1:23
  Speaker 3: and it's simply closer to the situation and oil is
• 1:26
  Speaker 3: probably worth thirty seconds. It's still up fifteen percent from
• 1:30
  Speaker 3: this time last week, so it hasn't calmed down, and
• 1:32
  Speaker 3: that's because I Ran itself was five percent of global
• 1:35
  Speaker 3: oil exports, which is meaningful, especially when you considered that
• 1:39
  Speaker 3: the oil market is always one percent either side of
• 1:41
  Speaker 3: being in balance. And then of course people are pricing
• 1:45
  Speaker 3: in a small probability that the conflict escalates in the
• 1:48
  Speaker 3: Middle East accounts for fifty percent of global oil exports.
• 1:52
  Speaker 2: SAM In the past, when we've had similar situations like this,
• 1:55
  Speaker 2: how have the markets responded?
• 1:58
  Speaker 3: Yeah, so you and I talked in February twenty twenty
• 2:01
  Speaker 3: two when Russia invaded Ukraine, and we talked in October
• 2:05
  Speaker 3: twenty twenty three when Harma attacked Israel, and the market
• 2:11
  Speaker 3: did not behave the way everyone thought it would back then.
• 2:14
  Speaker 3: So with Ukraine, the main impact was expected to be
• 2:18
  Speaker 3: European gas prices or energy prices, because remember, europe gas
• 2:23
  Speaker 3: prices faced the perfect storm of the threat of Russian
• 2:26
  Speaker 3: supplies being cut off and a lack of alternatives. However,
• 2:30
  Speaker 3: after an initial spike, European gas prices fell eighty percent
• 2:33
  Speaker 3: from their peaks, driven by excess supply of a demand. Equally,
• 2:36
  Speaker 3: after the harmless attacks, oil prices did rise ten percent initially,
• 2:40
  Speaker 3: but a month or two later they were much lower.
• 2:42
  Speaker 3: So the pointers markets typically overreact in the short term,
• 2:46
  Speaker 3: but normalizing the medium term. And when it comes to commodities,
• 2:49
  Speaker 3: there's that famous saying that the best cure for high
• 2:51
  Speaker 3: commodity prices is high commodity prices. In other words, oil
• 2:55
  Speaker 3: spikes higher at the margin that will slow demand and
• 2:58
  Speaker 3: at the margin that'll encourage a marginal barrel of oil
• 3:01
  Speaker 3: into the market.
• 3:02
  Speaker 2: Interesting, yeah, And so what does this all mean for investors?
• 3:04
  Speaker 3: Then? It just really hard to you should I can't
• 3:08
  Speaker 3: construct your long term portfolio based around these painful events.
• 3:11
  Speaker 3: It's really they're really hard to predict. And if we
• 3:13
  Speaker 3: zoom out, what drives equity markets over the medium term
• 3:16
  Speaker 3: is corporate earnings growth and economic growth which drives corporate
• 3:21
  Speaker 3: earnings growth is still fairly solid, as you and I
• 3:23
  Speaker 3: have been discussing the last few weeks, and Powell said overnight,
• 3:26
  Speaker 3: the US jobs market is still robust. But the final
• 3:29
  Speaker 3: point I'll make here, and you and I have been
• 3:31
  Speaker 3: discussing this for a couple of weeks, is the twenty
• 3:34
  Speaker 3: two percent bounce in the US equity market in the
• 3:36
  Speaker 3: last few weeks means the risks are now a little
• 3:38
  Speaker 3: bit more balanced.
• 3:39
  Speaker 2: From here at Josh, Hey, thank you very much, Sam,
• 3:43
  Speaker 2: appreciate and enjoy your long weekend. That Sam Dickey Official funds.
• 3:46
  Speaker 1: For more from News Talks b listen live on air
• 3:49
  Speaker 1: or online, and keep our shows with you wherever you
• 3:52
  Speaker 1: go with our podcasts on iHeartRadio