My portfolio surged past SGD 1.2m last week, everything has been going right the past month. The cherry on top was a the oil price shooting up due to fears of Israel attacking Iran's oil infrastructure.
I can't see any effect if Iran's oil export facilities are bombed. Iran only produces 3.7m bpd, half of which is exported - say under 2m. The Americans can release 1m bpd from their SPR for a month or two. Last year Saudi Arabia voluntarily cut 1m bpd, and OPEC+ an additional 1m. The world can make up for it.
Iran may retaliate against Saudi Arabia's oil facilities, that would cause a large oil increase. And a long lasting one. Don't think it'll happen, but its a small possibility.
I still expect oil to stay around $70-90 for a while, until reserves go down. Politics can drive it higher (middle east war) or lower (Trump peace deal with Saudis).
My portfolio is now heavily weighted to oil. Luke Gromen (33:52) suggests that gold will replace US bonds as a reserve store-of-value. Gold is the 'release valve' in the world's search for a new reserve currency. Governments would prefer gold to go up instead of oil - as oil is inflationary, even though they don't control it....they could affect it to try to increase production and stop oil rising too much.
In this scenario, I think gold miners skyrocket, while oil producers do ok (as oil hovers in between $70-90). Might be worthwhile buying more gold miners. They will go up unless:
- there's a non-inflationary recession (interest rates and gold goes down), or
- oil surges (diesel is a large cost of mining).
