B&H Wealth Strategies Discusses Markets In A World On Edge

Markets can feel irrational when the news is grim and the indexes are strong at the same time. We sit down to make that contradiction make sense, looking at how the ongoing Middle East conflict influences financial investment stability, investor psychology, and the day-to-day reality of rising costs. While headlines focus on geopolitical uncertainty, we focus on what actually moves portfolios: earnings, employment, inflation, interest rates, and energy prices.

We talk about why the market has been remarkably resilient beyond the first phase of the conflict, then zoom in on the place most families truly feel it: oil. When crude swings, it hits gas prices, utility bills, shipping, and ultimately the grocery store. We also break down which sectors can look steadier during uncertainty and why tech and other capital-intensive industries can whip around when rates rise and the cost of capital gets more expensive.

Then we get practical about behavior. We share the most common mistakes we see when investors react to scary headlines, why “stay the course” is a discipline rather than a slogan, and how long-term investors think differently than short-term traders. If you have a 401(k) and you’re still accumulating, we discuss why continuing contributions during volatility can matter more than trying to time the next move.

If this helped you think more clearly about investing during conflict, subscribe for more, share it with a friend who’s doom-scrolling the market, and leave a quick review so more listeners can find us.

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Securities and advisory services offered through Silver Oak Securities, Inc., Member FINRA/SIPC. Silver Oak and B&H Wealth Strategies are not affiliated. http://www.finra.org/ http://www.sipc.org/

Transcript

Welcome And Why It Matters

SPEAKER_00 0:03

Welcome to the Four Seasons Podcast, brought to you by BH Wealth Strategies, serving Northeast Tennessee and Southwest Virginia since 1966. Here, we guide you through the ever-changing seasons of your financial journey, offering insights to help you grow, protect, and enjoy your wealth. Ready to turn your financial dreams into reality? Dare to dream. And now, here's your host, President of BH Wealth Strategy, Jeff Bingham.

SPEAKER_04 0:44

Investors are watching energy prices, supply chain pressures, and geopolitical uncertainty more closely than ever. And understanding these shifts can help families stay grounded during turbulent times. Welcome back, everybody. Skip Monty, co-host slash producer, back in the studio with president of BH Wealth Strategies, Mr. Jeff Bingham, and COO and Associate Advisor, Jake Bingham. Jeff, Jake, welcome to the show.

SPEAKER_03 1:08

Thanks for having me, Skip. Look forward to talking on this topic. Same here. Hope you guys are having a good week.

SPEAKER_01 1:15

Very good week. Been very busy, hasn't it? Yes, it has. And they could probably attest to. So I'm now ready to record. All right.

SPEAKER_04 1:32

All right. Well, let's let's let's get in it.

Markets Stay Resilient Amid War

SPEAKER_04 1:35

So, Jeff, today we're we're diving into a topic that's been on a lot of people's minds for a while now. How has the ongoing conflict in the Middle East impacted financial investment stability? Won't you walk us walk us through that?

SPEAKER_01 1:53

Well, I think, you know, to start from the end and kind of work back and forth through that is that, you know, the the markets uh through all of this, with the exception of the the first, we'll say 30 days of the of the conflict, the war, whichever title you want to put on that, uh, where we saw kind of a corrected phase take place in the market. The markets are at all-time highs right now, you know, in in the United States. Global markets have have also held up fairly well uh throughout this as well. So, you know, it's always an interesting thing to see instability as you were describing uh a moment ago. Uh the markets have been amazingly resilient. And there's a number of reasons for that that we can cover as we go through

Oil Prices Drive Real Inflation Pain

SPEAKER_01 2:35

this. Um, but what has not been uh you know stable, uh been rising uh for the most part has been has been oil prices, you know, the by the barrel, thus pushing it into, you know, where Americans and around the globe fill it at the pump uh on their electric, you know, their energy bills, and thus it trickles into the grocery stores and every other place where, you know, uh because oil is what uh you know is the blood, if you will, or the uh the the that moves product and services around the globe. And so it's we've not been able to to uh stay away from that. But um, you know, we've seen oil prices spike as high as $120 through this. And now as we and we'll talk about this in a moment, as we uh closed yesterday, uh we were at about $70, a little over $75, $76 in change right now, crude oil is, you know, down from just two weeks ago, probably uh at roughly 100. So, I mean, that's an amazing drop, right? We're looking at, you know, 25% drop or so since since that point in time. So uh, and we can talk about the peace accord and that kind of thing. But that's kind of where we look at it. Markets have held up well, prices have gone up, inflation continues to be uh a problem, thus the affordability crisis remains front and center uh, you know, to uh to uh it's certainly middle class and lower middle class, you know, working class Americans that are out there. Um, you know, and the we can kind of continue to create a bit of a disparity, I think, uh, as markets go up and prices go up at the same time. Those that don't own stocks are not enjoying that kind of thing. Uh so the what as the old saying goes, it's that the rich keep getting richer and the poor uh, if you will, keep getting poorer. So we've got to find a way to kind of connect uh Wall Street and Main Street or Center Street uh here in Kingsford, as we like to say, uh, together. And that's where we're not that's not what we've done just yet.

Which Sectors Hold Up Better

SPEAKER_04 4:32

Now you mentioned that the that the the economies, I mean, you know, things have stayed pretty stable. Are there specific sectors that tend to remain more stable during geopolitical uncertainty?

SPEAKER_01 4:44

Uh well, you would think, are you want to take that? Okay. Um as a that's an interesting look under the hood. I mean, I you know, I I would say really looking at it, at least in this snapshot that we're looking at in this hundred days now, probably closer, and we're probably pushing 110 days or whatever, uh, maybe a little longer, uh, since the war began. Uh, that um that all sectors have kind of held up. Now, you've seen more volatile sectors. I mean, you've seen uh, you know, the technology sector, which is again the NASDAQ, is up 3% this week. We're recording this on June 19th, by the way. Uh, I think is up over 3% for the week. Markets are closed today as we record this, so they're gonna end the week up 3%. Uh, but we've seen volatility there uh in chipmakers, and then as the war and instability, as it kind of goes back and forth between we're gonna get a deal, we're not gonna get a deal, that drives interest rates and the higher cost of capital with capital-intensive companies with technology and and certainly the innovation, innovation rather, uh, with AI requires a lot of you know what we call capex spending or capital expenditure. Um, you know, the cost of capital is more expensive. So when we see rates go up as a result of the instability that's out there, those tend to be more volatile. Um, you know, healthcare, uh, financials and those types of uh companies, sectors, if you will, uh kind of remain a little bit more stable through this. And you would think, um, and I haven't looked at it specifically, you would think that the you know the military uh complexes, the you know, military contractors would be doing quite well. Now anecdotally, I've only looked at a couple of those, and they were surprisingly down for the year when we looked at Torch and Drummond, right? Uh which is kind of surprising. Um, but I can't I can't speak to that directly because that's a little bit out of my uh my expertise. But yeah, I don't know if that made any sense at all. But um the resiliency of the market has been quite astounding because that's the underlying fundamentals, the profit margins, the uh productivity, uh projected earnings growth going into 2027 that companies keep keep talking about uh keep putting out there is just is just really remarkable. Employment pictures remain strong. The the thing that has been persistent and stubborn is still inflation. And that inflation, you know, 60% of inflation number comes from uh at least it's estimated to be all from the the cost of energy, the cost of oil.

SPEAKER_04 7:14

Which has been all over the place. It's in it's interesting uh how as this conflict has gone from you know resolution soon, prices go down for oil, well for gas and uh at the pumps, and then well they attacked us, so we we we retaliated and the prices go back up. Uh I know it it for me it you know when I purchase gas, I I I I don't tend to fill up these days because I have faith that this thing is is uh going doing what it's doing, you know, and the prices continue to go down. So every day, you know, instead of filling up saying, Oh, the prices are only going to keep going, I you know, fill a half a tank and then the next day say, Yep, I save some money.

SPEAKER_01 7:59

And then maybe that's that's that's an interesting strategy. I like that.

SPEAKER_04 8:02

Yeah,

Avoid Knee Jerk Investing Decisions

SPEAKER_04 8:03

well, yeah. Well, speaking of common mistakes, what are some common mistakes that the the general investor, you know, street level person makes when reacting to this kind of conflict in the markets?

SPEAKER_01 8:14

All right. So I and Jake can kind of chime in here because we've had, I mean, this is conversations that we have on a day in and day out basis in here. It's also um, I have done what we call three quick fire or what I call quick quick fire videos to talk specifically about this. I did one in March, I did one in May, and I did one earlier this week. And what I said, and then one I did in March obviously was right in the middle of this thing, and the markets were going down and oil prices were spiking up. And what I spoke to at that point in time is that whole, you know, again, it's always you always hear stay the course. And I'm very careful about saying that because it doesn't mean you don't ever make changes to a portfolio, you just let time take care of it. That's not, you know, sometimes you have to make adjustments in portfolios. Uh they can sometimes they can be subtle and sometimes they can be more uh, you know, more less, less than subtle, let's say. But in this case, what I had said was is let let the portfolios do what they do. Let's let this play out for a minute or two and see where this thing goes. And that was, I think, on March the 17th. And we weren't quite at the low at that point in time for the year. We were pretty close. Um, and I began to suggest then, and I did again in May, where we had turned around by the time we got to the May, uh, the May video. Uh, and the markets had turned around quite nicely. Like I said, they bottomed at about the end of March. You know, since then we've set new record highs and we continue to kind of push into record territory right there. So that was a good call. Um, you know, and I thought, I really did believe, and you can go back and look at the video evidence that this thing would begin to get settled in the middle of June. Uh, and that is uh, you know, with as tenuous as this deal is, that's what we're looking at right now. So, you know, that's why you don't make these knee-jerk reactions. The clients want to, and they see the headline news. It's you know, it's what we call, you know, separating, you know, the noise from the news. You got to find the signal, right? And so we, you know, and our job is to, is to do that, to help our clients, you know, identify where the signal is. And um, you know, and that's um, that's paid off, you know, uh up to up to this point in time. We we'll see. But that's you know, we get those conversations in this room. Those are phone calls, those are emails that we get on a regular basis, but this is the the advice. We haven't we haven't changed that. We don't change it for different clients. You know, we might talk to them a little bit differently because their concerns, their fears, you know, maybe a little bit, you know, or are a little different and the portfolios are a little different, etc. But, you know, we let our portfolios do the work. We are built um to withstand storms, right? I mean, that's how we build, you know, our portfolios. Um, you know, we go back to uh the Warren Buffett's, you know, two rules of investing, which is rule one, you know, never lose money. And rule two is never forget rule number one. Now, that doesn't mean, again, that we don't see prices slide and we don't see portfolios decline in value, but we build portfolios for our moderate, you know, conservative, moderate, even growth clients to be able to withstand these kind of storms, right? You know, and so the uh we're built to get through these things. Stay the course. If you've got a 401k plan, you know, don't alter your, don't get more conservative in it, keep you keep buying. Uh, you know, I mean, like again, I would caveat that by saying, you know, I don't know everybody's situation that's out there that's listening. My clients, I know, but if you're a if you're uh an accumulator, you keep you keep adding money to it. You know, a lot of people when markets go down, uh, you know, want to stop, you know, feeding money to it. Why would I put money into something that's going down? It's because, you know, so far, as long as the U.S. stock market has been around, markets have always gone back up from their lows, right? So you want to buy, you know, as my dad used to say, you buy straw hats in December, right? So uh, you know, and so this is when you want to be buying so you can buy more shares, right? Of the things that you like, the companies you like, the funds you like, et cetera. It's how you create wealth.

SPEAKER_02 12:15

Uh something I see is like uh a lot of people in my generation are traders instead of investors. And I think uh traders react and investors stay the course. And that's that's what more young people need to do.

SPEAKER_04 12:27

Guys, thank you so much, Jeff. Great advice. Uh, and and appreciate you uh breaking that down very clearly for folks like me who don't fill their tank up when the prices are going down.

SPEAKER_01 12:38

Yeah, well, that's that's interesting because uh a little bit different, but kind of on the same uh on the same note as you were talking about there is that we have a we're going to a uh to a conference in uh actually out in Vegas, uh not not to go to Vegas, that's just where the conference is, uh at the end of of August. And so we were looking at plane tickets because we booked the deal and we're looking at plane tickets. And so my uh Sherry, my administrative assistant, you know, was do you want to buy the plane tickets now? And I've said, no, let's hold off. Because you know, I think I think the prices can come down. So, you know, it's so it's kind of funny that when you were saying that I was that's what uh

Outlook For A Deal And Stability

SPEAKER_01 13:18

what I was thinking of. But but I do think, you know, as we as we close this out, if if we can I mean here's the way I look at this if we get a reasonable, you know, deal, and it's tenuous, I get it, and people have no, you know, can have lack of trust in all these things. I personally believe there will be a deal struck and this thing will get taken care of, and they will negotiate over the next 60 days. And the Straits of Hormuz are going to open back up. You know, we're gonna cease hostilities, the straits are gonna open back up. So the flow of oil and other goods that flow through that very important strait that is very narrow, that the Iranians have been able to take hostage essentially and hold the globe hostage for the last 47 years. If we can ameliorate that to a degree, cut their nuclear ambitions, their nuclear warhead ambitions down and not allow that. Whether we get, as Trump likes to say, whether we get all the dust or not, I hope that we do. But we also, you know, rain them in from being able to create their long-range ballistic missiles, et cetera, basically defang them. The world will be a safer, more stable place for us as we live today. It'll be a much safer and stable place for our children and our grandchildren in the next generations. Um, and thus, and then the oil prices will remain more stable. We won't get these crazy spikes one way or the other. And I think as we move towards the fourth um, you know, and celebrate our 250, our 250th uh year uh of this of the American dream, I think that we're closer to that than than actually than most people think that are out there. So I'm very, I really do believe, uh not just for this firm, but I think for this country, the best is yet to come.

SPEAKER_04 15:05

Amen, brother. Same here. Same here. And I love your optimism. Guys, appreciate it. And uh we uh we'll see you in the next episode where I'm sure we'll be talking about this more.

Key Takeaways And Free Consult

SPEAKER_00 15:21

Thanks for tuning in to the Four Seasons Podcast, brought to you by BH Wealth Strategies, where your financial success is our priority. Schedule your free 20-minute consultation today by calling 423-247-1152 or by visiting bhretire.com. Take the first step toward making your financial dreams come true. Until next time, remember every season is the right season to plan for your future. Securities and registered investment advisory services offered through Silver Oak Securities, Inc. Member FINRA SIPC. BH Well Strategies and Silver Oak Securities, Inc. are not affiliated.