Inflation fears have returned because oil prices went up. Oil prices went up because the Middle East exists. The Middle East exists because God has a dark sense of humor about petroleum deposits.
Analysts say tensions between the U.S. and Iran are keeping prices elevated. They said this while staring at a chart. The chart showed a line going up and to the right. This is the extent of their analysis. They get paid six figures.
Retail traders are now panic-selling their portfolios because they read a headline with the word "Iran" in it. Last week they were buying tech stocks because a guy on YouTube told them interest rates would go down. The week before that they were buying gold because their uncle forwarded them an email. They have the memory of a goldfish and the risk tolerance of a hemophiliac on a trampoline.
The beautiful part is that none of this matters. Oil could hit $200 a barrel tomorrow. It could drop to $30 next month. Your brokerage account will lose money either way because you bought calls on a leveraged ETF you don't understand. You saw three green candles and thought you were John Paulson.
Here's what actually happens: oil goes up, headlines scream about inflation, the Fed releases a statement full of words like "transitory" and "data-dependent," and you convince yourself this time is different. This time you'll get out before the crash. This time you'll buy the dip at the exact bottom.
You won't. You never do. You'll buy after it's already up 40% and sell after it's down 60%, then spend the next year telling everyone at Thanksgiving that the markets are rigged.
The Middle East will still be a geopolitical powder keg when you're broke.
Photo by ayumi kubo on Unsplash
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