June 25, 2025 • 9 mins
On this week's Merryn Talks Your Money, Merryn Somerset Webb and John Stepek, author of Money Distilled, talk about navigating your portfolio amidst Middle East tensions. The conversation was recorded on Monday afternoon.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Marrin Talks
Your Money, the personal finance edition of Marin Talks Money
and these bonus podcasts. We talk about the best strategies
(00:22):
for making the most of your money. I'm married some
deetweb and with me Senior Border of Money to stilled
author John Stappack Hi John hil Okay, John, there is
a lot going on this week. We've got rising tensions
in the Middle East. We're worried that conflict is going
to engulf more of the regions. So we really wanted
to take a moment right now to talk about exactly
(00:43):
how people should be looking at their portfolio in this
kind of environment. And I kind of don't know why
we're bothering because I already know what you're going to
say and exactly the same way as you look at
your portfolio in any other environment, am I right?
Speaker 2 (00:56):
Yeah. The phrases that wonderful producer sum Are sent over
for the topic of this podcast was the phrase safe haven.
There are phrases I hate more in finance, but it's
very high on the list because.
Speaker 1 (01:13):
For him, I apologize for him, doesn't mean it not personal.
Speaker 2 (01:18):
She's just having them at me viewers. Hell, hr.
Speaker 3 (01:24):
Enough enough.
Speaker 1 (01:25):
What is what you're trying to say that there is
no such thing as a safe haven in a risky world?
Speaker 2 (01:30):
I know, I think it's more safe haven is very
dependent on what you're trying to protect yourself. Well, for
a start, it's like it implies that when people write about, oh,
what safe haven should you go for now that war
has erupted, it kind of implies the kind of market
time and that they always complain about otherwise. So there's
this idea that you should suddenly move all your money
(01:51):
to cash or something like that, just because it's kind
of scary. Headline has has come over, and there are
always scary headlines coming over. I mean, I think tensions
in the Middle East is probably the one kind of
constant of my entire lifetime, and there is always something
going on. There is always something to be worried about.
(02:13):
So there's that, But there is also the safe having thing.
Cash is a safe haven in as much as its
value will not go below its nominal value. So if
you put ten pounds in the bank or you know,
under your mattress, it will still be ten pounds in
ten years time, but will ten pounds still buy you
the same amount of stuff. No, it won't, so it's
(02:34):
lost value in real terms. So it's actually not a
safe haven, you know, if you're about to get inflation.
Same goes for bonds, which aren't as volatile. They don't
go up and down as much as equities, but if
inflation comes along, they're going to be watch worse for
you than probably equities will be.
Speaker 1 (02:49):
Cash is a safe haven if you're getting an interest
on it that is above the right of inflation. If
your main priority, and john whether you like it or not,
the main priority for lots of people is simply to
maintain they're purchasing power. So if they have cash and
they have it in an account, the interest rate of
which covers both the tax on the income and inflection,
(03:12):
even if they're even at the end, they're good.
Speaker 3 (03:16):
That's the safe heaven.
Speaker 2 (03:17):
That's true as long as you've got enough money. If
you've retired and say you're seventy five, and you now
know you've got enough money to last you for the
rest of your life, and you can find an account
that pays in real terms, and you're going to keep
up with it for again, the kind of the rest
of your life. Then yeah, that's probably what it's close
to safe having as you could get. If you're twenty five.
(03:38):
You can't put your money all in cash because you're
not gonna have enough to retire on when you come
to retire, So you're going to have to do something
with it, whether you like it or not. And again,
sort of history shows that over the very long term,
equities deliver the best real returns. Hopefully. I mean, yeah,
you cannot. You can always point to oh yeah, but
(03:59):
Japan might happen, or you know, it might turn that that.
You know, you're in Germany or Russia right before the
revolutionary before the same World War. The only safe having
is to diversify. See Stick some money in gold because
it kind of protects against kind of crazy events and
also kind of fiscal uncertainty. Stick some money in cash
because it gives you the optionality I'll typically kind of
(04:20):
keep up weigh inflation, but it won't it won't grow
you enough to retire on if something bonds in case
of deflation basically, and you have the rest in equities
for the kind of growth side. And I mean, obviously
it's it's a bit more complicated than that depending on
your own personal circumstances, et cetera, et cetera, et cetera.
But I think those are the four primary colors of
(04:40):
asset allocation, and really how you'd have split between those
blocks down to what your goals are and anything that
makes you think I should be running for a safe
having well that you need to stop and think, well,
wait a minute, why am I thinking this right now?
Because there hasn't been a point at which you should
have all of your money only in one asset unless
(05:04):
you're confident you've get accessable and you can work out
exactly what's going to harm you. I mean, even two
thousand and eight, which was the WOSCA financial crisis of
life times and quite possibly will be the worst financial
crisis of our life times, there wasn't something you could
describe as a see if haven permanently see if even there, employee,
if you put all your money at the US dollars
or something like that had been the best trade at the time,
(05:25):
but again it had been a one off trade.
Speaker 1 (05:27):
You are making a lot of sense, But I suppose
that the key point here is there will be a
lot of investors who are still spite listening to this podcast,
very very overexposed to the US, possibly under exposed to gold,
possibly not with very much cash, and possibly under exposed
to non US equity markets. So even though we've talked
(05:52):
about this a lot over the last few years, the
US market will still the best place to be until
relatively recently, not anymore and not this year, but until
relatively recently, so a lot of listeners, we'll still have
that portfolio, that sort of one trade portfolio that is
very avoid the US and doesn't have much So really,
I think what we're saying at the moment is that
(06:13):
if that is you, now is a time a bit late,
but you know, it's all fine. Now is the time
to look at them and say, do I really want
that heavy exposure to one country with extremely expensive equities
or might it be better to cut that down going
to countries with less expensive equities and also into some
(06:34):
of the things that are traditional head just such as
cash and gold. And of course, if you want to
hedge we were talking about this earlier, if you want
to hedge against done the trouble in the Middle East itself,
then possibly holding some energy and oil in particular is
a good way to do that.
Speaker 3 (06:49):
Is that fair. I think that's basically what you're saying.
Speaker 2 (06:52):
Oh, no, thing that is fair, And I think yeah.
I mean if you had all of it explores, then
that way, that has been a certain failure of diversitytion
and asset allocation or you on your part or in
the part of your financial advisor or whatever, and it
would be a good idea to, you know, think about
rectifying that.
Speaker 1 (07:09):
Yeah, and I sup the it's also another opportunity for
us to remind people that if you hold a global
ETF you are not diversified.
Speaker 2 (07:18):
Yeah, I mean it's still something like sexty odd percent
is going to be in US equities, and that hasn't
always been the case. Because I think that's the other thing.
People sometimes think, oh, yeah, but hasn't that always been
the case, and it's like, well no, actually, really it
really hasn't. That's a symptom of us or valuation.
Speaker 3 (07:34):
Yeah, so you see that exemplified in the market.
Speaker 1 (07:38):
Okay, I'm not sure there's really much more that we
can say about that. And we talked, we talked in
our markets around up earlier in the week about crypto
and how it hasn't really been working as a hedge
or a particularly good diversifier over the last short period.
Speaker 3 (07:51):
That remains a case, right, Yeah.
Speaker 2 (07:54):
I don't think that if you are a fairly hands
off investor, you really need to body about having kept
to exposure and your portfolio again that and against it.
I don't think that it's all a scarm. I don't
think we're going to wake up one day and it's
going to be vanished.
Speaker 3 (08:09):
He does.
Speaker 2 (08:09):
Really, I'm urging here. I don't want all the tweets.
I don't want all the.
Speaker 1 (08:17):
Tweets, all right, I haven't got anything more to say,
have you, John.
Speaker 2 (08:22):
I don't think it's just it's this straightfall stuff. Diversification
as an allocation, that's your safe haven. It rains.
Speaker 3 (08:29):
Yes, and don't forget.
Speaker 1 (08:31):
This is the key point we talked about there on
a couple of podcasts with Gas recently, that if markets fall,
let's say they fall, let's say global markets fall twenty
five percent or something like that, the ones that will
recover that fastest are most likely to be the ones
that were cheapest in the first place. So it's worth
thinking about that. The UK, Latin America, where else is.
Speaker 3 (08:51):
Cheap, honestly just about.
Speaker 2 (08:54):
Cheap the moment I imagine markets, particularly ploy could do
with the day in the sun. But then you have
said that for a while.
Speaker 1 (09:01):
Yeah, got a few good imagining markets podcasts coming out,
By the way, everyone listen.
Speaker 3 (09:04):
Out for those excellent Thanks for listening for this week's
Marren Talk to Your Money.
Speaker 1 (09:13):
If you like our share rate, review and subscribe wherever
you listen to podcasts.
Speaker 3 (09:16):
Also be short to follow me and John.
Speaker 1 (09:17):
On exceor Twitter at marins w and John underscores to epic.
This episode was produced by Semisadia, Production support by Moses
and Questions and comments on this show and all our
shows are always welcome.
Speaker 3 (09:28):
I'll show Email is Marror Money at bluebook dot net.
Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Marrin Talks
Your Money, the personal finance edition of Marin Talks Money
and these bonus podcasts. We talk about the best strategies
(00:22):
for making the most of your money. I'm married some
deetweb and with me Senior Border of Money to stilled
author John Stappack Hi John hil Okay, John, there is
a lot going on this week. We've got rising tensions
in the Middle East. We're worried that conflict is going
to engulf more of the regions. So we really wanted
to take a moment right now to talk about exactly
(00:43):
how people should be looking at their portfolio in this
kind of environment. And I kind of don't know why
we're bothering because I already know what you're going to
say and exactly the same way as you look at
your portfolio in any other environment, am I right?
Speaker 2 (00:56):
Yeah. The phrases that wonderful producer sum Are sent over
for the topic of this podcast was the phrase safe haven.
There are phrases I hate more in finance, but it's
very high on the list because.
Speaker 1 (01:13):
For him, I apologize for him, doesn't mean it not personal.
Speaker 2 (01:18):
She's just having them at me viewers. Hell, hr.
Speaker 3 (01:24):
Enough enough.
Speaker 1 (01:25):
What is what you're trying to say that there is
no such thing as a safe haven in a risky world?
Speaker 2 (01:30):
I know, I think it's more safe haven is very
dependent on what you're trying to protect yourself. Well, for
a start, it's like it implies that when people write about, oh,
what safe haven should you go for now that war
has erupted, it kind of implies the kind of market
time and that they always complain about otherwise. So there's
this idea that you should suddenly move all your money
(01:51):
to cash or something like that, just because it's kind
of scary. Headline has has come over, and there are
always scary headlines coming over. I mean, I think tensions
in the Middle East is probably the one kind of
constant of my entire lifetime, and there is always something
going on. There is always something to be worried about.
(02:13):
So there's that, But there is also the safe having thing.
Cash is a safe haven in as much as its
value will not go below its nominal value. So if
you put ten pounds in the bank or you know,
under your mattress, it will still be ten pounds in
ten years time, but will ten pounds still buy you
the same amount of stuff. No, it won't, so it's
(02:34):
lost value in real terms. So it's actually not a
safe haven, you know, if you're about to get inflation.
Same goes for bonds, which aren't as volatile. They don't
go up and down as much as equities, but if
inflation comes along, they're going to be watch worse for
you than probably equities will be.
Speaker 1 (02:49):
Cash is a safe haven if you're getting an interest
on it that is above the right of inflation. If
your main priority, and john whether you like it or not,
the main priority for lots of people is simply to
maintain they're purchasing power. So if they have cash and
they have it in an account, the interest rate of
which covers both the tax on the income and inflection,
(03:12):
even if they're even at the end, they're good.
Speaker 3 (03:16):
That's the safe heaven.
Speaker 2 (03:17):
That's true as long as you've got enough money. If
you've retired and say you're seventy five, and you now
know you've got enough money to last you for the
rest of your life, and you can find an account
that pays in real terms, and you're going to keep
up with it for again, the kind of the rest
of your life. Then yeah, that's probably what it's close
to safe having as you could get. If you're twenty five.
(03:38):
You can't put your money all in cash because you're
not gonna have enough to retire on when you come
to retire, So you're going to have to do something
with it, whether you like it or not. And again,
sort of history shows that over the very long term,
equities deliver the best real returns. Hopefully. I mean, yeah,
you cannot. You can always point to oh yeah, but
(03:59):
Japan might happen, or you know, it might turn that that.
You know, you're in Germany or Russia right before the
revolutionary before the same World War. The only safe having
is to diversify. See Stick some money in gold because
it kind of protects against kind of crazy events and
also kind of fiscal uncertainty. Stick some money in cash
because it gives you the optionality I'll typically kind of
(04:20):
keep up weigh inflation, but it won't it won't grow
you enough to retire on if something bonds in case
of deflation basically, and you have the rest in equities
for the kind of growth side. And I mean, obviously
it's it's a bit more complicated than that depending on
your own personal circumstances, et cetera, et cetera, et cetera.
But I think those are the four primary colors of
(04:40):
asset allocation, and really how you'd have split between those
blocks down to what your goals are and anything that
makes you think I should be running for a safe
having well that you need to stop and think, well,
wait a minute, why am I thinking this right now?
Because there hasn't been a point at which you should
have all of your money only in one asset unless
(05:04):
you're confident you've get accessable and you can work out
exactly what's going to harm you. I mean, even two
thousand and eight, which was the WOSCA financial crisis of
life times and quite possibly will be the worst financial
crisis of our life times, there wasn't something you could
describe as a see if haven permanently see if even there, employee,
if you put all your money at the US dollars
or something like that had been the best trade at the time,
(05:25):
but again it had been a one off trade.
Speaker 1 (05:27):
You are making a lot of sense, But I suppose
that the key point here is there will be a
lot of investors who are still spite listening to this podcast,
very very overexposed to the US, possibly under exposed to gold,
possibly not with very much cash, and possibly under exposed
to non US equity markets. So even though we've talked
(05:52):
about this a lot over the last few years, the
US market will still the best place to be until
relatively recently, not anymore and not this year, but until
relatively recently, so a lot of listeners, we'll still have
that portfolio, that sort of one trade portfolio that is
very avoid the US and doesn't have much So really,
I think what we're saying at the moment is that
(06:13):
if that is you, now is a time a bit late,
but you know, it's all fine. Now is the time
to look at them and say, do I really want
that heavy exposure to one country with extremely expensive equities
or might it be better to cut that down going
to countries with less expensive equities and also into some
(06:34):
of the things that are traditional head just such as
cash and gold. And of course, if you want to
hedge we were talking about this earlier, if you want
to hedge against done the trouble in the Middle East itself,
then possibly holding some energy and oil in particular is
a good way to do that.
Speaker 3 (06:49):
Is that fair. I think that's basically what you're saying.
Speaker 2 (06:52):
Oh, no, thing that is fair, And I think yeah.
I mean if you had all of it explores, then
that way, that has been a certain failure of diversitytion
and asset allocation or you on your part or in
the part of your financial advisor or whatever, and it
would be a good idea to, you know, think about
rectifying that.
Speaker 1 (07:09):
Yeah, and I sup the it's also another opportunity for
us to remind people that if you hold a global
ETF you are not diversified.
Speaker 2 (07:18):
Yeah, I mean it's still something like sexty odd percent
is going to be in US equities, and that hasn't
always been the case. Because I think that's the other thing.
People sometimes think, oh, yeah, but hasn't that always been
the case, and it's like, well no, actually, really it
really hasn't. That's a symptom of us or valuation.
Speaker 3 (07:34):
Yeah, so you see that exemplified in the market.
Speaker 1 (07:38):
Okay, I'm not sure there's really much more that we
can say about that. And we talked, we talked in
our markets around up earlier in the week about crypto
and how it hasn't really been working as a hedge
or a particularly good diversifier over the last short period.
Speaker 3 (07:51):
That remains a case, right, Yeah.
Speaker 2 (07:54):
I don't think that if you are a fairly hands
off investor, you really need to body about having kept
to exposure and your portfolio again that and against it.
I don't think that it's all a scarm. I don't
think we're going to wake up one day and it's
going to be vanished.
Speaker 3 (08:09):
He does.
Speaker 2 (08:09):
Really, I'm urging here. I don't want all the tweets.
I don't want all the.
Speaker 1 (08:17):
Tweets, all right, I haven't got anything more to say,
have you, John.
Speaker 2 (08:22):
I don't think it's just it's this straightfall stuff. Diversification
as an allocation, that's your safe haven. It rains.
Speaker 3 (08:29):
Yes, and don't forget.
Speaker 1 (08:31):
This is the key point we talked about there on
a couple of podcasts with Gas recently, that if markets fall,
let's say they fall, let's say global markets fall twenty
five percent or something like that, the ones that will
recover that fastest are most likely to be the ones
that were cheapest in the first place. So it's worth
thinking about that. The UK, Latin America, where else is.
Speaker 3 (08:51):
Cheap, honestly just about.
Speaker 2 (08:54):
Cheap the moment I imagine markets, particularly ploy could do
with the day in the sun. But then you have
said that for a while.
Speaker 1 (09:01):
Yeah, got a few good imagining markets podcasts coming out,
By the way, everyone listen.
Speaker 3 (09:04):
Out for those excellent Thanks for listening for this week's
Marren Talk to Your Money.
Speaker 1 (09:13):
If you like our share rate, review and subscribe wherever
you listen to podcasts.
Speaker 3 (09:16):
Also be short to follow me and John.
Speaker 1 (09:17):
On exceor Twitter at marins w and John underscores to epic.
This episode was produced by Semisadia, Production support by Moses
and Questions and comments on this show and all our
shows are always welcome.
Speaker 3 (09:28):
I'll show Email is Marror Money at bluebook dot net.
Host
Merryn Somerset Webb
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