The other day I was thinking about how abstract an “oil shock” sounds until I was standing at the servo watching the numbers climb. What used to feel like a normal fill-up suddenly felt expensive enough to notice. And now Victoria has made public transport free across the state through 30 April, which tells you this is no longer just a market story.
That is what makes this moment tricky for investors.
Usually people want a neat script for times like this. Buy tech. Buy gold. Hide in cash. Bet on AI. But the market is not being neat right now.
Oil surged because this stopped being just another war headline and became a real supply problem. The Strait of Hormuz, one of the world’s most important oil shipping routes, has been heavily disrupted, and that has pushed energy prices sharply higher.
At the same time, gold, which is supposed to be the grown-up in the room, has not recently been reassuring either. Reuters reported that spot gold fell 11.8% in March.
Then there is AI. AI is still the biggest story in markets, but it is no longer a clean story. The S&P 500 software and services index shed about $1 trillion in market value in just one week as investors worried fast moving AI tools could threaten traditional software business models. I covered this in a previous issue.
So what should everyday investors like you and me be watching?
Not energy stocks after a huge run. That trade feels too obvious now.
- What I would be watching instead is what higher oil does to inflation expectations and interest rate expectations, because that is the transmission belt into bond markets and equity valuations.
- I would also be watching whether quality software and AI names are being sold down too aggressively.
- And I would not ignore defensive sectors either. Any undervalued defensive company in area such as healthcare, utilities and consumer staples is worth a look.
If you have spare cash, this may be a better time to build positions in quality undervalued assets you already understand. If you do not have spare cash, the answer is usually not to do something dramatic. Remember, the capital losses are only paper losses as long as you do not sell.
In messy markets, the edge is being hard to knock over.
If you want help zooming out from the headlines and seeing the bigger picture, my Wealth Tracker can help you keep an eye on your overall progress without obsessing over every market swing.
Talk soon,
Irene
P.S. Over Easter, I moved the newsletter to Kit behind the scenes, so you may notice things looking a little cleaner from here on.
