Welcome to Fix It Friday, the podcast segment that simplifies financial strategies to help you make smarter decisions. In this episode, Jonathan Blau discusses the impact of geopolitical crises on investments, particularly focusing on the recent spike in oil prices. He emphasizes that while such events may cause short-term volatility, they often do not affect long-term stock market performance. Jonathan encourages investors to stick to their long-term plans and not react impulsively to media-driven fears, highlighting the importance of earnings growth as the primary driver of stock prices.
What You’ll Learn:
Geopolitical events can cause short-term volatility but not long-term damage.
Oil price spikes often lead to media catastrophizing.
Historical data shows that markets can recover quickly after shocks.
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Key Timestamps:
00:00 Introduction and podcast disclaimer
01:30 Geopolitical Crises and Investment Strategies
04:02 Understanding Oil Price Spikes and Market Reactions
07:12 Long-Term Investment Focus vs. Short-Term Volatility
09:40 What defines a successful investment
Key Takeaways:
Successful investing is based on goals and a solid plan and fear should not dictate investment decisions.
Long-term returns are not controlled by current events.
Companies respond rationally to crises, often strengthening their positions.
The media often misrepresents the impact of geopolitical events.
About the Host:
Jonathan Blau is the President and CEO of Fusion Family Wealth, a fiduciary wealth management firm he founded in 2013 to help families achieve clarity, confidence, and purpose with their money. With a deep focus on behavioral finance, Jonathan teaches investors how to recognize emotional biases and make evidence-based decisions that support long-term success. A sought-after speaker in wealth management, Jonathan previously held senior roles in tax and estate planning at Arthur Andersen. He holds a BS in Finance, an MS in Taxation, and an MBA in Accounting. Based on Long Island, Jonathan is active in the local business community, supports organizations such as the Middle Market Alliance and Sunrise Day Camp, and enjoys boating with his family.
A copy of Fusion's current written disclosure brochure discussing our advisory [00:00:15] services and fees is available upon request or at www.fusionfamilywealth.com.
Jonathan Blau: Hello everybody and welcome to another episode of the Fix It Friday edition of the Crazy Wealthy Podcast. Today I wanted to talk to you about, uh, a topic that is.
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Voiceover: Welcome to the Crazy Wealthy Podcast with your host, Jonathan Blau. Whether you're just starting out [00:01:00] or are an experienced investor, join Jonathan as he seeks to illuminate and demystify the complexities of making consistently rational financial decisions. Under conditions of uncertainty, he'll chat with professionals from the advice [00:01:15] world, entrepreneurs, executives.
And more to share fresh perspectives on making sound decisions that maximize your wealth. And now here's your host.
'm not just gonna talk about [:
So when that happens. The media, of course, catastrophizes with all kinds of headlines designed to, uh, induce everybody to click on on the stories so that they can increase their ad revenues. They're not trying to [00:02:00] help anybody become better investors. They're just trying to, uh, advance their business objectives at the expense of the investor.
spikes to the stock market, [:
Things like pandemics and recessions and tariffs, [00:02:45] uh, impact stock prices to almost no extent in the long run. The one thing that drives stock prices, as I've said in prior podcasts, is earnings companies earnings growth and it's earnings and only earnings. That is the [00:03:00] signal. All of the other things I mentioned, the pandemic's, recessions, geopolitical, uh, shocks, those are just noise.
% in energy, the s [:
In other words, the assumption is simple oils up, stocks have to go down. So the reality is a little different or a lot different than what investors' narratives created by the media in their minds. What we don't do, if fusion is we [00:03:45] never tell investors to suppress the fears that they're feeling. As a result, what we simply en ensure that they do is not reflect those fears by changing their long-term investment portfolios.
designed to meet their most [:
They always lead to catastrophic media headlines and almost always to short term volatility. [00:04:30] But what happened after that, believe it or not, on average, in the 12 months following the two day spike, the s and p 500 gained about 24% for the next 12 months. Not just [00:04:45] different than what people think would happen.
tive, and the reason is when [:
Looking at recent history over the past six years or so, we went down 34% in 33 days during the pandemic, uh, shutdown in 2020. In 2022, we saw a 40 year spike [00:05:30] in interest rates and inflation coincidental with Russia's invasion of Ukraine, causing a 25% drop just a couple of years after the COVID crisis.
And then in:
The only way possible by humanly manufacturing [00:06:15] them as a result of selling into them, out of fear. So it's okay to feel fear, but once you act on it by changing your portfolio, that's when the real trouble sets in. So we have to just embrace the idea that long-term [00:06:30] returns to repeat are not controlled by current events.
ties to maximize shareholder [:
They do the opposite of what. Irrational governments do during crisis, our government will loan more money, take on more debt. [00:07:00] Companies do the opposite, so they get stronger and they buy lesser capable competitors businesses at pennies on the dollar, and then they continue to grow earnings over the long term.
oader research shows done by [:
In other words, the 12 months returns following the shock periods and the non shock periods were on average about the same. So when we saw oil surge earlier this month, 20% on March 5th and sixth, no one knew what markets would do [00:08:00] next. We can't know that. And even though history is not a predictor, and it may not even always be a perfect guide, it's the only guide we've got.
people expect from these oil [:
They say, given the current environment, what portfolio moves does your firm advise your clients to make right now? And our answer was always the same. Our clients don't have any new [00:08:45] portfolio moves to make. When we established their plan many years ago, they made all their decisions. They decided that in order to meet their most important goals, because their biggest threat is inflation, that they needed to have investments that grew past [00:09:00] inflation, which are ownership of great companies.
nflation. So in other words, [:
And I'm gonna, I'm gonna, um, leave you with, with one final thought, which is my company's credo. All successful investments in our experience are goal, focus and planning driven. They're based on goals [00:09:45] and then they're accomplished by following a plan. All successful investors continuously follow their plan, all failed investments in our experience.
While all failed, investors [:
[00:10:15] Don't confuse short-term shock with long-term damage, and always stay adhered to your plan in spite of the scary headlines. Hope you enjoyed this week's version of Fixed It Friday.
Voiceover: Thank [:
Disclaimer: The previous podcast by Fusion Family Wealth, LLC Fusion was intended for general information purposes only. No portion of the podcast serves as the receipt of or is a substitute for personalized investment advice from Fusion or any other investment professional of your choosing. Different types of [00:11:00] investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy or any non-investment related or planning services, discussion or content will be profitable.
n will be achieved if Fusion [:
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