Worldwide Financial Planning

A sharp escalation of fighting in the Middle East pushed the oil price above $100 for the first time in two months, leaving investors once again trying to work out what Donald Trump wants from the war.

Passive funds have done investors a great service by cutting costs and helping ordinary savers access markets through ISAs and pensions. But small and cheap are not the same as safe. Mosquitoes are small too.

Oil prices have risen again, though far less steeply than after war broke out in late February. Bond yields have also moved less dramatically than in March, but they remain well above pre-war levels. Petrol and diesel receive less attention than crude oil, yet their prices have risen sharply, lending weight to industry warnings about shortages of refined products.

A snowball is a lovely image for investing, until you remember that most of us spend the first 10 years staring at a very unimpressive damp tennis ball and wondering why it isn’t an avalanche yet. If you remember how that snowman doubles in size with each roll toward the end you will get the drift of this column.

This week the Middle East ceasefire fell apart. Iran attacked tankers in the Strait of Hormuz, the US answered with two days of strikes, and President Trump declared the truce over.

There are two types of investors I worry about - one who thinks they can predict the market and one who knows they cannot, but waits anyway, hoping Donald Trump keeps his mouth shut and his fingers off the phone, so the right time will arrive. Good luck with that.