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Tag: market volatility

Covid lessons and the Strait of Hormuz image

Lessons from Covid: How Global Disruptions Impact Your Investments

Written by Minich MacGregor Wealth Management on . Posted in News, Posts.

No, you are not reading a message that’s been stuck in our drafts since 2020. This message is about the world in 2026. But as you’ll see, the lessons we can apply today are drawn from the markets as they were exactly six years ago.

As you know, geopolitical conflicts tend to have a short-lived effect on the markets. But sometimes, conflicts can lead to economic disruption. When that happens, investors must contend with major uncertainty…and uncertainty means volatility. This is what we’re seeing now due to the ongoing war in Iran and the near-total closure of the Strait of Hormuz.

Disruption, uncertainty, and volatility.

Here’s the situation in a nutshell: 20% of the world’s oil flows through the Strait.1 With only a few tankers passing through over the last few weeks, the world is facing the single largest supply disruption in history, made worse by the fact that Iran has also struck nearby oil and gas facilities across the Persian Gulf. Due to this, the price of oil has risen to over $100 a barrel, with Brent crude, the global benchmark, rising as high as $113.1

Oil, as you know, is the blood that powers the world economy. Furthermore, it’s not just oil that passes through the Strait. In fact, up to 20% of the world’s natural gas and 30% of its fertilizer transported by ship must first transit the Strait before reaching the wider ocean.2

Take a moment to visualize what this looks like. Three products, oil, gas, and fertilizer, all choked off in one of the world’s most important pipelines. Over the coming weeks, ships that have already left the Strait will finish delivering what supplies they have, but after that, shortages may begin.

Now, the United States does not heavily rely on oil and gas passing through the Strait, as we have our own supply of both. But Asia and Australia do, which means that goods produced on these continents may become much more expensive. Natural gas is a critical part of producing fertilizer; fertilizer is a critical part of growing food. Both gas and oil are used to produce plastic, which is used to contain nearly everything that gets shipped from one place to another. Shipping, of course, requires oil.

Some countries that normally depend on oil and gas from the Persian Gulf can potentially pivot to other forms of energy. China and India, for example, have enormous coal reserves. But not all countries can do this, and even those that can, probably won’t be able to replace all of what they normally get from the Strait. Furthermore, pivots take time. As a result, many countries simply may not be able to produce the amount of goods they normally do. And as we know from the Law of Supply and Demand, when supply goes down but demand does not, prices rise. Not just for oil and gas, but for everything that is made or transported by oil and gas.

Here is where the lessons of the Covid years begin to kick in, because we’ve seen something like this before. When supply chains get disrupted, as they were during the Covid shutdowns of 2020, prices rise. We call this inflation.

When the price of goods rises, something else tends to rise with it: The cost of money itself. By this, we’re referring to interest rates. Here in the United States, the Federal Reserve, which is mandated to keep prices stable, typically fights inflation by raising interest rates. (Investors learned all about this after 2020, too.) Higher interest rates make it more expensive to borrow money, which in turn tamps down on spending. Lower spending, in turn, forces businesses to reduce their prices, thereby reducing inflation.

As of this writing, the Fed has not raised the Federal Funds Rate, which is the key interest rate that our central bank controls. But this isn’t the only interest rate that matters. One rate that has jumped in recent weeks is that of the 10-year Treasury Note.3 This interest rate — which is essentially the rate at which the government borrows from investors for a term of 10 years — influences mortgage rates, credit cards, and other types of loans. The fact that it’s on the rise is the market’s way of saying that investors expect interest rates in general to rise, too.  

Put all these factors together and you suddenly have a situation that looks a bit like the Covid-era. There are some important differences, of course. For one thing, oil prices initially plummeted during the Covid shutdowns. And it was the combination of snarled supply chains plus a major surge in demand after the world reopened that triggered inflation. But the potential trio of economic disruption, rising inflation, and higher interest rates is doing the same thing it did all those years ago: Inject significant uncertainty into the markets.

Which is why the Dow, the S&P 500, and the Nasdaq are all in “market correction” territory.4 (A correction, remember, is a drop of 10% or more from a recent high.)

Now, note that we used the word “potential” just a moment ago. That’s because we’re still in hypothetical territory here. We don’t yet know exactly whether and how much inflation will go up, or for how long, or what that will mean for interest rates over the long-term. We certainly can’t predict what the markets will do. Corrections are common, and it’s possible the war could end as quickly as it started.

But there are two major mistakes an investor can make whenever uncertainty kicks in. The first is to bury our heads in the sand and pretend everything is fine. As you can see from all the analysis you just read, we are certainly not going to make that mistake here at Minich MacGregor Wealth Management. Because there’s no point in sugarcoating it: This situation has major ramifications for the global economy. And even if the war were to end tomorrow, that doesn’t guarantee everything will go back to normal overnight. Oil prices alone may remain elevated for some time. (There’s a saying among economists that oil prices rise like a rocket and fall like a feather.)

The second mistake is to take that uncertainty and think the sky is falling. And here is where the major lessons from Covid come into play.

Over the coming days and weeks, we may see plenty of headlines that point out just how serious the situation is. We might see words like “unprecedented” or “historic.” Terms like “correction,” “downturn,” or even “bear market” could be on the cards, too. But if that happens, remember this: We’ve been through this before. And we’ve made it through this before, too.

Close your eyes and think back to how much uncertainty existed in the spring of 2020. We can still remember where we were when we heard the news about quarantines and shelter-in-place restrictions. We can still remember how the schools closed, and “non-essential” offices closed, and grocery store shelves got frighteningly bare. And we can remember how the markets reacted to it all. We’re sure you can, too.

We can also recall what happened next. How the markets stabilized, rebounded, and expanded.

Covid taught us that patience, steadiness, and the ability to look past immediate headlines become more important during times of increased uncertainty, not less. Because while uncertainty creates volatility, it also creates opportunity. Opportunities for companies to adapt, and in adapting, find new ways to grow. Opportunities for the markets to rebound, and in rebounding, reach new heights. It’s not easy to endure the volatility to get to the opportunity. It never is. But the one thing we know for sure is that we do not want to be absent when opportunity comes.

The pandemic was a historic event that had major ramifications for the global economy. It’s possible that what’s happening in Iran will be, too. We don’t know how long it will last, or how deep its impacts will be. But even historic events eventually become just that: History.

One day, we expect we’ll write a message titled, “Lessons from Iran,” too.

The final lesson that we hope all our clients learned during Covid, is that our team will always be here for you. Whether the current volatility resolves or increases, we are always available to answer your questions, address your concerns, and examine every development. So, if you would ever like to talk — about Iran, about your portfolio, or anything else — please reach out. We always love to hear from you!  

1 “A new oil shock is building,” CNBC, https://www.cnbc.com/2026/03/28/oil-gas-prices-iran-war-hormuz.html
2 “It’s not just oil. Here comes Hormuz inflation.” Politico, https://www.politico.com/news/2026/03/14/hormuz-inflation-helium-fertilizer-00828680
3 “Treasury yields rise as Iran ceasefire optimism fades,” CNBC, https://www.cnbc.com/2026/03/26/treasury-yields-rise-uncertainty-ceasefire-talks.html
4 “Dow closes in correction,” CNN, http://cnn.com/2026/03/27/investing/us-stocks-iran

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Chasing Squirrels image

Don’t Chase Squirrels: Stick to Your Plan

Written by Minich MacGregor Wealth Management on . Posted in Featured, Posts.

There are few activities more relaxing than a picnic in the park on a warm summer’s evening. But even under the glow of a setting sun, hearing the distant sounds of birds chirping and children laughing, we still can find it hard to turn off the “financial advisor” part of our brains.

Especially when we see a dog chasing squirrels.

We’re sure you’ve seen it before: When an excitable pooch sees a flash of movement in the corner of his left eye. He darts off, trying to catch the furry prey, only for it to scamper up a tree. Then, to the right, another squirrel. Or a bird, a rabbit, or a cat. Off he goes. But after ten minutes of frantic pursuit, swapping one target for another, the dog usually comes up empty-pawed.

What does this have to do with being a financial advisor? Well, because whenever we see this, our minds turn to how many investors often get caught up in chasing squirrels, too.

One of the most common questions we get from friends, acquaintances, and even potential clients is, “Is it time for me to put everything into X?” In other words, “is it time to change what I’m doing and do something totally different?”

Now, the thing about “X” is not only that it can be anything; it changes based on the season, or the most recent headlines, or the discourse on social media. Sometimes, X is the overall stock market, but just as often, it’s something like:

  • A specific company or industry that’s dominating the news
  • Cryptocurrency
  • Extremely complex financial products
  • Gold or some other type of commodity

Here’s the other thing about X: It’s not always bad. Sometimes, for some investors, anything from the list above could be a potentially goodinvestment. The problem is not X itself. The problem is that X is always changing. And when investors constantly seek to change with it, always bouncing from one hot trend to the next, they are, in effect, chasing squirrels.

All investors are vulnerable to this, even the most experienced. FOMO, or the “fear of missing out,” is a very real and powerful phenomenon. Nobody wants to feel left behind. Nobody wants to miss out on an opportunity.

Squirrel chasing can become especially prevalent when the markets are volatile or flat for long stretches. During times like this, many investors may seek to move their money into cash, bonds, or some other type of investment. They reason that they can skip the downside, wait patiently, and then come back in when the markets recover.

But this is squirrel chasing, too, and here’s why. Take a look at this chart.1

DecadePrice
return		Excluding best 10 days per decadeExcluding worst 10 days per decadeExcluding best/worst 10 days per decade
1970s17%-20%59%8%
1980s227%108%572%328%
1990s316%186%526%330%
2000s-24%-62%57%-21%
2010s190%95%351%203%

According to research, if investors were somehow able to skip the worst ten market trading days in a given decade, their total returns would be astronomically high. But there are two problems with this. The first problem is that if those same investors missed out on the ten best days each decade, their returns would be significantly lower than if they just stayed put. The second problem? The market’s best days often follow the worst. So even investors who somehow skip a bad day will probably end up missing out on a great day. And missing out on too many great days can be disastrous.

Here’s another way to look at it. According to more recent research, if a hypothetical investor put $10,000 investment into the S&P 500 between the beginning of 2005 and the end of 2024 and did nothing else, their total return would be 10.4%.2 If that same investor missed the market’s ten best days? The return would be 6.1%. If they missed the thirty best days? 3.1%. Forty? -0.6%. The data is clear: When it comes to investing in your long-term goals, there is only one dependable approach: Consistency. Sticking to a long-term plan is much more reliable than chasing squirrels.

The reason we’re saying all this is because not too long ago, investors had to endure some very bad days. Stocks were historically volatile in early April and even flirted with bear market territory. Many investors sold off, tried to time the market, or placed bets on some other type of investment. But by the end of June, the S&P 500 and NASDAQ had both risen to all-time highs.3

Of course, there will be volatile days in the future. There will be times when a new, enticing form of “X” dominates the headlines. And there will be times when we need to review your investments and determine if they still make sense for your situation. But when it comes to investing, the best question we get asked is this: “What’s the most important thing I can do to work toward my goals?”

The answer, of course, is to never, ever chase squirrels.

Have a great summer!

1 “Why investors should never try to time the stock market,” CNBC, www.cnbc.com/2021/03/24/this-chart-shows-why-investors-should-never-try-to-time-the-stock-market.html
2 “Selling out during market’s worst days can hurt you,” CNBC, www.cnbc.com/2025/04/07/selling-out-during-the-markets-worst-days-can-hurt-you-research.html
3 “America’s stock market rebound is complete as S&P 500, Nasdaq hit record highs,” CNN, www.cnn.com/2025/06/27/investing/stock-market-record-dow-sandp

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war time rules golf

Rules for Getting Through Market Volatility

Written by Minich MacGregor Wealth Management on . Posted in News, Posts.

Like getting the flu or visiting the DMV, market volatility is one of those facts of life that never gets more pleasant no matter how many times we experience it.  As you know, the markets have been very volatile of late.  In large part this has been spurred on by the fears and uncertainty surrounding the tariffs that have been announced or discussed by the White House. This has many investors asking, “What should I do?” 

As financial advisors, we hear that question a lot.  While thinking about how to answer it, we came across an interesting story that illustrates exactly what investors should do.  It’s called: 

The War-Time Rules for the Richmond Golf Club

The year was 1940.  World War II was well under way, with France having fallen to Germany.  When the Germans began bombing England in preparation for an invasion, some of the bombs fell on the Richmond Golf Club in southwest London.      

Undaunted, the golfers, many of whom were veterans of World War I, devised a set of “war-time rules” to ensure they could keep playing even during a bombing raid.1  Decades later, the rules were rediscovered.  They are still as incredible now as they were then…and as amusing!   

  1. Players are asked to collect bomb and shrapnel splinters to save these causing damage to the mowing machines.
  2. During gunfire or while bombs are falling, players may take cover without penalty for ceasing play.
  3. The positions of known delayed action bombs are marked by red flags at a reasonably — but not guaranteed — safe distance therefrom.
  4. Shrapnel on the fairways or bunkers within a club’s length of a ball may be moved without penalty. No penalty shall be incurred if a ball is thereby caused to move accidentally.
  5. A ball moved by enemy action may be replaced, or if completely destroyed, a new ball may be dropped not nearer the hole without penalty.
  6. A ball lying in a crater may be lifted and dropped not nearer the hole without penalty. 
  7. A player whose stroke is affected by the simultaneous explosion of a bomb may play another ball from the same place.  Penalty, one stroke.

We love this story because it illustrates a very important point: Whenever we face uncertainty in life, whenever we’re not sure what to do, it’s valuable to have rules in place that can help guide us and stabilize us.  From the Golden Rule to the Fire Rule (stop, drop, and roll), rules make things easy to remember, easy to understand, and easier to get through.  So, with those golfers’ plucky example in mind, here are our rules for getting through even the roughest stretches of market volatility:

1. Continue to save and contribute to your retirement accounts.  Market volatility often means lower prices. That both lowers the financial barrier to invest and makes it easier to buy good companies.  It’s like shopping for Christmas lights after the holidays are over — the prices are lower, but the product is the same.  Furthermore, by continuing to save and invest even during volatility, you are positioning yourself for the rebound.  Remember, it’s time in the markets, not timing the markets, that matters. 

2. Examine your current risk level.  That said, there’s nothing wrong with looking at your portfolio and saying, “You know what?  Maybe I don’t want to deal with this level of risk.”  Many investors end up becoming overexuberant and taking on too much risk during bull markets, and changes in your life sometimes require a change in your investment strategy.  After all, even the Richmond Club golfers took cover when the bombs were dropping. 

3. Invert the problem.  One of the great investors, Charlie Munger, used to talk about how inverting his thinking was his most reliable form of decision-making.  In other words, during a time when other investors are trying to figure out the “smart thing to do,” replace that with, “What is the foolish thing to do?”  Or “What will I most regret doing in five or ten years?”  It’s often much easier to figure out what not to do than what you should do.  By starting there and working backwards, you will arrive at the correct decision — which is often much simpler than it first appeared! 

4. Focus on a different aspect of financial planning.  There is more to reaching your financial goals than investing.  When the markets are turbulent and the headlines are scary, there’s a simple solution: Stop thinking about them!  Instead, focus on something else that will help get you closer to your goals.  Look at your cash flow.  Update your will.  Start a rainy-day fund.  Get your tax planning done.  Concentrate on increasing your income.  There are lots of possibilities, all of which are far more important in the long-term than stressing about markets in the short-term.         

5. Commit to understanding why the markets are behaving the way they are.  Most people don’t spend their days scrutinizing the markets.  As a result, volatility can feel particularly stressful for investors who don’t immediately have an explanation for it.  But Marie Curie once said: “Nothing in life is to be feared, it is only to be understood.”  In my experience, when we take the time to understand the cause of volatility, the volatility itself becomes less unsettling.  Understanding brings clarity, and clarity brings confidence — that all volatility, no matter the cause, is temporary. 

The British were famous for their “keep calm and carry on” attitude during World War II.  The “War-Time Rules for the Richmond Golf Club” is a perfect example of this.  The rules they created helped those golfers make sense of a scary situation by continuing to do what they loved.  We can apply that principle to every area of our lives — including our finances and including the markets. 

One last point.  Sometimes, the media will try to get us to choose fear over rules like these.  When that happens, remember this.  During the War, the Richmond rules became famous even in Germany.  None other than Joseph Goebbels heard about them and publicly declared, “The English snobs try to impress the people with a kind of pretended heroism.  They can do so without danger, because, as everyone knows, the German Air Force devotes itself only to the destruction of military targets.”1 

Still, in the very next raid, German planes bombed the golf club’s laundry facilities. 

The members continued playing.    

1 “Our Famous War Time Rules,” The Richmond Golf Club, https://therichmondgolfclub.com/war-time-rules

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