Episode 98
Weak Dollar Policy, Oil Reserve Crisis & Why the Mag Seven Stumble Matters
Richard Taylor and Brian Dunhill are back with an unscripted breakdown of the forces driving global markets in August 2026.
First up, the yen carry trade unravelling. Brian explains how the Trump administration quietly forced Japan to sell euros instead of US treasuries, what that reveals about a deliberate weak dollar policy, and why currency devaluation is now Washington’s preferred tool for managing a 120% debt-to-GDP ratio. For expats and cross-border investors, the implications are massive.
Then, markets. Despite constant noise, the S&P 500 has had a strong run, but the Magnificent Seven are stumbling. Richard and Brian debate whether that’s a healthy rotation into broader equities or an early warning that overexposed portfolios are about to feel pain.
They also dig into the US Strategic Petroleum Reserve dropping below 300 million barrels for the first time since the 1980s, why much of it may be unusable, and how rising gas prices could become the political pressure point that forces a resolution to the Iran conflict.
As always: real talk, zero scripts, and two advisors who manage money for a living trying to make sense of a genuinely chaotic month!
—
Expat Wealth is supported by Plan First Wealth. Plan First Wealth is a Registered Investment Advisor serving fellow expatriates and immigrants living across the US on matters such as retirement planning, investment management, tax planning and non-US asset management.
—
Expat Wealth is affiliated with Plan First Wealth LLC, an SEC registered investment advisor. The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Plan First Wealth.
Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that listeners seek their own advice in these areas.
ABOUT RICHARD:
Richard Taylor is a British expat, dual citizen (UK & US). Originally from Bolton, he now lives in Greenwich, CT, where Plan First Wealth has its head office.
As the firm’s leader, Richard launched Taylor & Taylor, now Plan First Wealth, and continues to fuel the firm’s growth. Richard is a Chartered Financial Planner (UK – CII) in addition to holding the IMC (CFA UK) and Series 65 (US – FINRA).
Connect with Richard on LinkedIn
TRANSCRIPT:
Brian Dunhill:
[00:00:00 – 00:00:13]
I think it’s even simpler. We have the greatest deficit we’ve ever had, 120% debt to GDP. There’s only three ways that you can pay for your deficit. Now our actual debt spending on the interest is over a trillion dollars per year.
Richard Taylor:
[00:00:14 – 00:00:34]
So you’re referring to how Elon Musk was able to basically strong arm the Nasdaq into ripping up their rule book and letting him onto the NASDAQ way sooner than they otherwise would have been. So in one month, they released 172 million barrels of oil, and now we have less than 300 million. So that can, that can go very quickly.
Brian Dunhill:
[00:00:34 – 00:00:43]
We can scare you even more, Richard. 100 Million barrels of that strategic reserve are believed not to be usable because the infrastructure is too old.
Richard Taylor:
[00:00:46 – 00:02:12]
Welcome to Expat Wealth, a Plan first wealth podcast dedicated to helping ambitious expatriates in America and Americans overseas thrive. I’m your host, Richard Taylor and Plan first wealth is the business I founded and run today. And we work with successful expatriates, immigrants and internationally minded Americans to make the most of opportunity and avoid the expat landmines. First, a quick disclaimer. While Plan First Wealth, LLC is an SEC registered investment advisor, the views and opinions expressed in this program are those of the speakers and do not necessarily reflect the the views and positions of Plan First Wealth. Information presented is for educational purposes only. Now, if you aren’t already receiving our emails, please go to our website, www.planfirstwealth.com and sign up there. It’s free and you’ll be notified every time we drop a new episode. And so much more. Okay, let’s get back to this week’s show. Welcome back to another episode of Macro Aggressions. This is the show where myself and my friend. Enemy, Mortal kombatant friend, good friend. Back by unpopular demand, we have Brian Dunhill of Dunhill Financial. My counterpart. Right. Can I call you my counterpart? I’m a Brit in America advising and working with Brits. You’re an American in the UK working in and advising Americans in the UK and Europe and further afield.
Brian Dunhill:
[00:02:13 – 00:02:19]
So, counterpart, I like the twins reference we used before. You’re Arnold and I’m Danny DeVito.
Richard Taylor:
[00:02:23 – 00:03:08]
Okay. I mean, I’m gonna take that. Obviously you better. Anyway, we are back to talk about what’s going on in the world. What’s happened in the last month since we’ve. Since we saw you. We both manage money for our clients. We’re both very heavily involved in the cross border world. We think that Gives us a unique perspective that’s relevant for the people we work with. And we just want to unpack what’s going on, what we think might, the future might hold and what our clients and people we work with should be, should be thinking about, should be cognizant of. And in fact, just prior to getting on this call, we had dealt with, you know, one of the most pressing topics, which was, or is, I should say, the U.S. office versus the U.K. office. And I think we, I think we were uni. I think we’re agreed, right?
Brian Dunhill:
[00:03:08 – 00:03:14]
We are completely agreed. There are different cultures and different ways of looking at the world in a great, great satirical.
Richard Taylor:
[00:03:17 – 00:03:36]
That’s exactly how you put it when we were off camera. So absolutely. It’s lovely that you, you bring the same person to the screen that you do in real life. But we, I, I mean, are we going to say it? I’m gonna say it. I’m gonna say, as a huge fan of the British Office, I prefer the American Office.
Brian Dunhill:
[00:03:36 – 00:03:42]
Yeah. But I love that you come in with the mean intro right after saying that the UK office was meaner than the US Office.
Richard Taylor:
[00:03:45 – 00:04:07]
It was. Mean is the wrong word, but it was definitely British. Harder to watch. Yeah, it was very cringe inducing, which was meant to be, obviously. And you said you’re still surprised by the amount of Brits who still haven’t. No. Refuse to watch the American Office. And this is my Brits. If any Brits listen to this, get your act together, go and give it a listen. It is fantastic.
Brian Dunhill:
[00:04:07 – 00:04:15]
It’s a great sense of humor. Gotta go into it. Speaking of British sense of humor, we have to talk about the weather, right?
Richard Taylor:
[00:04:16 – 00:04:19]
Oh, yeah. And how you got in today and what the traffic was like.
Brian Dunhill:
[00:04:19 – 00:04:29]
Well, I know you just walked down the staircase, so therefore I, I can skip that question. But we’re going through, like, I, I think this is our fourth heat wave over here in Europe. Is it four?
Richard Taylor:
[00:04:29 – 00:04:36]
Yeah. I feel like, I don’t know, I feel like I’m having a heat wave in my basement right now. I’m about to put the AC on. Oh, yeah, ac, yeah, you have here.
Brian Dunhill:
[00:04:36 – 00:04:47]
The rest of the world doesn’t have ac, but I don’t know if you, if you’ve seen this, but in Italy there’s a huge problem with cheese melting and they have valuable cheese.
Richard Taylor:
[00:04:48 – 00:04:58]
That is such a wonderful statement. That is just. Oh, God, I miss Europe so much. Italy has a problem with the heat wave because cheese is melt. It could only should have been France, but like, that is wonderful.
Brian Dunhill:
[00:04:58 – 00:05:47]
No, well, why it’s important that it’s Italy, not France is, is because most of this cheese is used as collateral at the banks to actually buy the extra cheese because they age it for up to five years. Parmigiano, you know your Parmesan cheese, essentially 80% of that is typically leveraged at the bank. You know you’re getting cheese loans and we looked it up, we looked it up. There’s nearly 500,000 cheese wheels that are used as leverage or as collateral for leverage at the bank. Which means there’s over 300 million euros worth of cheese loans and it’s melting, it’s slowly melting.
Richard Taylor:
[00:05:48 – 00:06:04]
Guys, this, this is a, this is why you need a cross border advisors. No one is bringing this to your attention. Otherwise no one cares. No one in America cares about melting cheese in Italy and the collateral at the bank. This is why you need Britain and American to bring these unique perspectives to.
Brian Dunhill:
[00:06:04 – 00:06:12]
You on, on next month’s episode we’ll be talking about the whiskey gods. You know the evaporation of whiskey up in Scotland.
Richard Taylor:
[00:06:12 – 00:06:15]
Right. Brian, I want to say you’ve got a new Prime Minister. We do again.
Brian Dunhill:
[00:06:15 – 00:06:18]
We do. This is our seventh Prime Minister in.
Richard Taylor:
[00:06:18 – 00:06:24]
10 Years which if anything points to the rip roaring success of Brexit. That must be it.
Brian Dunhill:
[00:06:24 – 00:06:45]
Well, see I was going to go a different direction. I was, I was going to go with, you know, when, when I was at Lehman Brothers until somebody had been there at least six months or a year, you didn’t even bother learning their names. So I’ve decided I’m not going to learn his policies until he’s been in here for 521 days, which is the average length of a Prime Minister in the last decade.
Richard Taylor:
[00:06:45 – 00:07:11]
But no, might be a wise, a wise approach. But yeah, you’ve got Andy Manchester Mayor, you know, so I’m slightly familiar with him because I lived in Manchester before I left the uk. Know what? He’s got more riz than the Last Guy, as the, as the younguns would say. And I think that’s a good thing. I think you politicians need a bit of Riz, so, And he’s got a vision. I know it’s not everyone’s vision, but he’s got a vision. And I also think that was severely lacking for the Last Guy. And you know, good luck to him. I say.
Brian Dunhill:
[00:07:11 – 00:07:16]
I, I, I love that you call him the Last Guy. Doesn’t even have a name anymore, just the Last Guy.
Richard Taylor:
[00:07:16 – 00:07:27]
Well I, I think the Last Guy was a good human being. He, but his entire Persona evokes that response. The last guy, he was just so bland on everything.
Brian Dunhill:
[00:07:28 – 00:07:48]
Yeah, but that’s exactly what we needed after such a long period of time of the Tories was basically the only way labor could win was by running how the Democrats need to run in November and in. In two years, which is we are not the Tories or we are not the Republicans.
Richard Taylor:
[00:07:48 – 00:08:04]
I think you need more than that. I think that’ll be a mistake for the Democrats. I think they need more than that. That’s why you have. These Mandamis are doing as well because they’re so charismatic. Why this El sayed? Because he’s so charismatic. You know, even if I wish it wasn’t so, I still think it’s spectacularly important in politics.
Brian Dunhill:
[00:08:04 – 00:08:35]
Yes, but you have to remember sometimes that can work for a mayor that’s actually trying to bring in a localized vantage point, but harder on a countrywide basis. In other words, I think Andy has to reinvent himself some from what he did as Manchester mayor to of course do going forward. And that’s what I’m afraid of with some of his policies. I’m hoping that he goes more global instead of regional. But his policies sound very regionalized. You know, getting things out.
Richard Taylor:
[00:08:35 – 00:08:45]
You don’t do both. Brian, can you not evolve power to the different regions, which I think is a good thing, whilst also you’re being a global leader and being support globalization. They’re mutually exclusive.
Brian Dunhill:
[00:08:45 – 00:08:51]
I once read in a fortune cookie that if you chase two rabbits, you’ll catch neither. You know, and fortune cookies are right.
Richard Taylor:
[00:08:51 – 00:08:59]
Okay, Richard, that was very good, actually. Just point that out there. Okay, let’s agree to disagree. But we agree young Andy’s got Riz.
Brian Dunhill:
[00:09:00 – 00:09:08]
And we agree we both wish him the best. I hope he has a lot of success. I don’t want London to shrink like it did last year. That scares me.
Richard Taylor:
[00:09:08 – 00:09:25]
You know, we might both joke and. And I. I think we both really are not big fans of Brexit, but I do hope someone can write this ship. You know, I’ve watched from afar. I think the UK has floundered for 10 years and I don’t wish to see that continue. So.
Brian Dunhill:
[00:09:25 – 00:09:57]
See, I will agree to disagree on certain parts of that. London has flourished under Brexit. The. The financial industry has employed 30 to 40,000 extra people in London than before Brexit. But I would rather see it flourishing as part of Europe instead of as the, you know, essentially Singapore and of the west or those types of things. So it has more ability by getting closer to Europe. And I think Keira Starmer was good for that, and I hope Andy will continue that.
Richard Taylor:
[00:09:58 – 00:09:59]
Okay, very good.
Brian Dunhill:
[00:09:59 – 00:10:06]
More importantly, Richard, in politics tomorrow, Bin Man. Bin man will beat Nigel Farage. That.
Richard Taylor:
[00:10:06 – 00:10:17]
I’m calling it Bin Face. All right, Fingers crossed. Count Bin Face. Absolutely. Fingers crossed. I. I doubt it. I seriously doubt it. But one can hope. So watch his space.
Brian Dunhill:
[00:10:17 – 00:10:18]
Well, I’ll be supporting him.
Richard Taylor:
[00:10:18 – 00:10:37]
So let’s get to the main topics here. We want to talk about three things that have happened or you think might happen that are relevant. And, you know, let’s give you your. Let’s give you a due. The first one I want to talk about is FX and this yen carry trade and. Or what’s going on with the yen. And you’ve been talking about this for a while and, you know, stuff’s happening.
Brian Dunhill:
[00:10:37 – 00:10:55]
We’ve been waffling, waffling on about this. I actually, I’ve been waffling on about this for 20 years. That Japan is this great market that’s extremely interesting, but the demographics are killing it. And therefore they’re overprinting because of their, their demographics. And that has led to a carry trade, which is people borrowing.
Richard Taylor:
[00:10:55 – 00:10:57]
They’re overprinting because everyone’s just getting too old.
Brian Dunhill:
[00:10:57 – 00:12:26]
Absolutely. In a declining population. Right. So essentially, you could borrow in yen, you could go ahead and put that money into Mexican pesos and net a return that was over what the S&P 500 was. Now, naturally, that means every single hedge fund manager was playing that carry trade, and it got overly crowded. Now, all of a sudden, when Japan reversed their policies and started increasing interest rates, the surprise factor wasn’t what the bank of Japan did, it’s that essentially the Federal Reserve came in and got involved and prevented them from selling too many of their U.S. treasuries. Now this, all of that little confusing, I know, but to me, the interesting part is we know the Trump administration wants a weak dollar policy, but this has proved that since Japan is currently holding $1.114 trillion worth of US treasuries. So a lot. They don’t want the dollar to fall too fast. They then forced them to sell their euros instead of their dollars, which caught the ECB off guard. So, once again, we always bring back that the Trump administration is very much like the Nixon administration and the Reagan administration. The Trump administration is messing with currency markets in a big way to devalue, but to try to control things without Brian White.
Richard Taylor:
[00:12:26 – 00:12:32]
Let’s just tell people why they’re devaluing to make our exports more affordable. And more in demand.
Brian Dunhill:
[00:12:33 – 00:13:09]
I think it’s even simpler. We have the greatest deficit we’ve ever had, 120% debt to GDP. There’s only three ways that you can pay for your deficit. Now. Our actual debt spending on the interest is over a trillion dollars per year. But essentially you can either raise taxes, you can’t get reelected after that, you can lower expenditures, while Elon Musk got bored of doing that after what, a couple months, or essentially you can inflate your way out of it. Decreasing your currency builds inflation, therefore it reduces the cost of paying off your debt.
Richard Taylor:
[00:13:09 – 00:13:31]
It’s going to be so interesting to watch this play out because obviously he’s just spent the last two years harassing the governor of the bank, the government, bank of England, the Fed chairman, to lower interest rates. Yeah, he’s just spent the last year and a half basically trying to criminalize the outgoing Fed chairman. So how is that tension, how is that juxtaposition going to play out?
Brian Dunhill:
[00:13:31 – 00:14:14]
Now? It proves that we shouldn’t be just paying attention to what the interest rate is, but what they’re doing with other currencies to play with that. Because what we have to remember is the majority of American voters don’t pay attention to what the currency rate is of the US Dollar versus other currencies. But a lot of Americans, what is it, over 60% of Americans have, have a home, and therefore a good portion of those will have mortgages. Therefore, they’re going to pay attention to interest rates. So it plays into the hand of, they know they have an election in November. They know the consumer already feels cash strapped and therefore they’re going to use the other tools that they can use as a Federal Reserve. It’s not just a one trick pony. And Trump’s going to manipulate this.
Richard Taylor:
[00:14:14 – 00:15:12]
So you think this is a clear sign that feeds into your overall narrative and assertion that the Trump administration is devaluing the US Dollar and will continue to do so, but are trying to control this. And what this means is that we can expect a weaker dollar going forward, a progressively weaker dollar, which, what does that mean for our clients? So for most of my clients or the clients, plan first wealth probably going to stay in the U.S. not necessarily, though. And we’re seeing more and more go back to the UK and we’re seeing, we’re seeing many actually now go to, to Europe. Just this week, just today, we’ve had a call from someone who’s going back to the UK in a year. I, I can’t, I’ve not, I’VE been here doing this for nearly 11 years. I haven’t seen anything like this. It’s just suddenly exploded. People are leaving. And for you, you have lots of clients who have got, who are American, have got lots of US dollar assets, but who are now living in Europe, uk, who are living in pounds and dollars.
Brian Dunhill:
[00:15:13 – 00:15:23]
I’ve never seen this big of an explosion of Americans moving abroad. And the demographics are showing that, you know, it’s the first year that we have a declining population in the United States and what is it, a century now?
Richard Taylor:
[00:15:24 – 00:15:25]
That’s wild.
Brian Dunhill:
[00:15:25 – 00:15:43]
So if all of a sudden more people are moving out than coming into the United States, well, they have to think about their money in the currency that they’re going to be living on. I’m either going to be right or wrong. I’m. And I’m not going to sit there and say, I’ve got a crystal ball for all these different things. This is just.
Richard Taylor:
[00:15:43 – 00:15:51]
Wait, you haven’t got. Why are we here then? What are we doing? You promised me, you told me you had a crystal ball and that’s why I invited you on this show.
Brian Dunhill:
[00:15:52 – 00:15:54]
And that’s the episode. Thanks, Richard. Bye.
Richard Taylor:
[00:15:57 – 00:15:59]
God damn it. I need to find someone with a crystal ball now.
Brian Dunhill:
[00:16:00 – 00:16:23]
But if all of a sudden you at least invest your safe money in the currency that you’re going to be utilizing it and you’re not going to have that currency risk. And so if you have a client that’s in the United States for a period of time, 10 years from now, they’re going to move back to the uk, they should be putting their safe money, their fixed income into pounds instead of dollars. Same thing for somebody living on.
Richard Taylor:
[00:16:23 – 00:17:02]
We bang this drum constantly. You want your funds, your ass extent that you can in the currency where you’re going to be living and retiring. So if you are in the US and you’re going back to the uk, you want to start thinking about having more funds in the in pounds. And if you’re an American like your kind of clients in the UK and Europe, you need to have your investments or you need to think you might try to get a good chunk of your investments into pounds and euros. But as you know, anyone connected to the US tax system, US, US citizen, green card holders, whatever, that’s incredibly difficult and very challenging to do tax efficiently and compliantly. So this is not something you want to wander into yourself.
Brian Dunhill:
[00:17:02 – 00:17:49]
And even just beyond that, you go talk to different aspects of how do you invest in a vehicle that’s compliant in those different types of ways. If you buy as a US individual a fund here in the uk, you’ll end up with what’s called a pfic. But if you buy it in the us, you end up potentially getting into a passive instrument which, especially when it comes to fixed income globally, that means you might end up in the wrong currencies, you might end up in the wrong duration, you might end up in different places on that spectrum that you don’t want to be. Which takes us to our next topic, which is peak passive, because we’ve been talking about this offline quite a bit. I know you use passive instruments and I use passive instruments.
Richard Taylor:
[00:17:50 – 00:17:50]
Big fan.
Brian Dunhill:
[00:17:51 – 00:17:53]
What exactly is a passive instrument, Richard?
Richard Taylor:
[00:17:54 – 00:17:55]
Oh God, put me on the spot there.
Brian Dunhill:
[00:17:55 – 00:17:56]
Absolutely.
Richard Taylor:
[00:17:56 – 00:18:55]
What do you think I am? It’s financial advisor. So passive, passive style of investing is rather than picking winners, trying to identify winners, be that specific companies or even to an extent regions. Although there is no such thing as truly passive, you’re always making a call on extent, how you invest in different regions. You can, you can take some of that out of it by going by size of the country, gdp. Exactly. But, but there’s always, there’s no such thing in my opinion as true. True passive. There’s always some sort of active decisions, but there’s degrees of active and the ultimate active is like picking Coca Cola over Pepsi or whatever it might be. Passive is just rather than trying to make these bets, it is buying stock markets on mass. So the S&P 500 or the Russell 2000 or the Footsie 100, I could go on and on and on, but you’re not then relying, you’re just, you’re just, you’re just trying to plug, we talk about you trying to plug yourself into the global market and let global capitalism do its thing rather than trying to pick winners over losers.
Brian Dunhill:
[00:18:55 – 00:18:56]
Absolutely.
Richard Taylor:
[00:18:56 – 00:19:57]
I’m excited to announce that Expat wealth has its first sponsor, the Global Financial Planning Institute. The GFPI exists to provide education, community tools, resources and ongoing research for financial planners and other advanced financial professionals working with international and cross border clients in the US and Americans abroad. I’m a GFP Institute fellow and I’ve put all our employees through their GFPI programs when they join us. I’ve met some great people, I’ve learned a ton. It’s a genuine community of internationally minded folk doing their best to serve their clients properly and critically sharing what they know in the oftentimes challenging and ambiguous US cross border environment. And as anyone in this sector will tell you, you’re Always learning. So if you work with international clients and or Americans abroad, or if this is an area you’re looking to get into, check out the gfpi@www.gfp.in stute you will be glad you did and I hope to see you there soon.
Brian Dunhill:
[00:19:58 – 00:20:29]
Now what’s amazing is since the introduction of the trackers, so like the S&P 500 funds, etc. Nearly 53% of money invested is in passive instruments. So 30 years ago we’d all go out and buy mutual funds. You know, when I started in this industry there was 27 mutual funds and they all started with American funds. That’s how I was taught. But they were all active funds. Now 53%.
Richard Taylor:
[00:20:29 – 00:20:38]
Brian, I would love to know what percent of new monies went into passive. I bet it’s way higher. I bet a lot of that 47 is legacy assets with big gains that can’t be taken out.
Brian Dunhill:
[00:20:38 – 00:21:33]
Oh, 100, 100. But that’s, that’s to where the question has always been when do we get to peak passive? When do we get to, to the place where there’s so many inefficiencies from being passive? Because too many people are passive. And most of the most, most of the mathematicians will say between 70 and 90%. Right. That it basically topples and it no longer really works because then active can completely take advantage of the whole system. Now this last IPO a couple months ago, I know we’re all sick of hearing about it and all sick of talking about it, but with SpaceX and the potentials of anthropic and OpenAI AI coming in and them getting inserted into indexes too quickly, there should be the question of whether peak passive is coming sooner rather than later because people are manipulating themselves into the indexes instead of.
Richard Taylor:
[00:21:33 – 00:21:34]
Just.
Brian Dunhill:
[00:21:36 – 00:21:45]
Having a set rule. That’s, that’s a part of things, I. E. The bigger get bigger because they know that they’re going to be bought across the board.
Richard Taylor:
[00:21:46 – 00:22:10]
So you’re referring to how the SpaceX was allowed was able. Elon Musk was able to basically strong army the Nasdaq. Was it NASDAQ into ripping up their rule book and letting him letting them onto the NASDAQ way sooner than they otherwise would have been and flouting all the usual requirements in terms of profitability and length of time post ipo, that kind of thing.
Brian Dunhill:
[00:22:10 – 00:22:36]
Right. They nearly got themselves in the S&P 500. This is the, this is the first time that I’ve seen some, some big news item that I’ve Gotten a handful of clients calling me saying, make sure that never shows up inside of my portfolio. And thank goodness we don’t ever have the QQQs. So knowing that in a year they might get themselves in the S&P 500, we’re having to think about whether we want to keep the S&P 500 as one of our big positions. We might have to use different elements.
Richard Taylor:
[00:22:36 – 00:22:54]
Right. So what we’re talking about here though is because we’re in agreement about where we’re both looking, right, which is we’re both big fans of passive, but we’re looking at these like they’re still passive, but they’re kind of like hybrid strategies. I don’t know how you describe them. Like dimensional springs to mind.
Brian Dunhill:
[00:22:54 – 00:23:03]
Thematic would be the actual term that we would use because instead of them following an index, they’re following a methodology.
Richard Taylor:
[00:23:03 – 00:23:23]
Right. So this is the great. So S&P 500. To be an S&P 500 tracker or ETF, you have to follow the rules. You have to follow exactly what the S and P lay down. Whereas if you’re a dimensional large cap fund that, that nominally tracks the S&P 500 but isn’t bound by the same rules, you can opt out of things you think are a bad idea.
Brian Dunhill:
[00:23:23 – 00:23:24]
Absolutely, absolutely.
Richard Taylor:
[00:23:24 – 00:23:32]
And I agree, I think that’s, I think that’s the. We’re, we’re, we’re actually going to dimensional conference in, in October because we’re leaning that way now.
Brian Dunhill:
[00:23:32 – 00:23:56]
It’s going to be a much different world. And I think, I think historically we’ve always seen kind of American exceptionalism and then a global exceptionalism, you know, so this is where I’ve never believed in investing passively in say emerging markets. They’re so differing and you get 10, 15 years where, where just that index doesn’t work. But if you go with say an Avantis, when it comes to.
Richard Taylor:
[00:23:56 – 00:23:59]
Yeah, that’s the emerging markets one we use.
Brian Dunhill:
[00:23:59 – 00:24:21]
We’re the same way all of a sudden because they’ve got a methodology with how they’re picking. Instead of going bottom up from a country vantage point, you, you can end up having decent returns over the course of time instead of based on just purely the US dollar and how it’s performing. So you don’t get these 10, 15 year gaps where you could earn more by owning US Treasuries.
Richard Taylor:
[00:24:21 – 00:25:30]
Hey listen, just as we like wrap up the section here, I agree with everything you’ve said. We’re doing some of the same things you’re doing and we’re looking in some of the same places for the same sort of solutions. So we’re on the same page. But I do wonder peak passive about whether we ever will get to a point, to a true point where active can take over, as you were saying before, because you can just exploit all the passive inefficiencies. And the reason behind that is trading ain’t going anywhere, right? The, the big institutions are going to continue trading. And so that’s a, that’s a form of active. But also the having done this job for 11 years and also now being com very clued in to the, the, the multitude of, of investing podcasts which honestly even the market ones where they talk about buying trackers, it’s all about trade. They’re all about trading. Active management and the army of people who hang on this that I know from listening to it and also from Reddit, there’s always going to be a huge proportion of people who want to and believe it is very possible. And frankly, some people believe easy to actively trade markets and make money.
Brian Dunhill:
[00:25:30 – 00:26:15]
I don’t think it’s a question of is it easy to trade the markets or not. I think if it wasn’t for AI, we’d probably be in recession right now. And if it wasn’t for the Mag 7 over the last 10, 15 years, we probably wouldn’t be so giddy about the stock market. Right? We had years where it was 7 stocks and 493 stocks. 7 Brought in most of the earnings. 493 Didn’t do all that well. The last month we’ve been talking about them as the lag seven. And if seven stocks that make up whatever it is, 42, 43% of the S&P 500 turn into longtime laggards, a lot of people are going to be looking for new strategies, of course, but.
Richard Taylor:
[00:26:15 – 00:26:31]
I, I don’t have the stats to hand. But I heard that the, it’s kind of a sign of a healthy market, right? These big stocks have been dominating for so long and there’s, and in boom times, there’s always a sector that dominates. And now as they’re having a struggle, the, the wider market is kind of is kind of picking up some of the, the slack.
Brian Dunhill:
[00:26:31 – 00:26:57]
So it should be. And I think that’s that last part of the market that, you know, I’ve always kind of steered clear of them just believing that we’re getting an evolutionary change in how we power the world. But the oil markets have been stellar this year, mostly because of what Donnie is doing over there. In the Middle East. But we had a news the last couple of days that.
Richard Taylor:
[00:26:57 – 00:27:00]
Wait, are we moving on to. Are we moving on to the third thing here?
Brian Dunhill:
[00:27:01 – 00:27:02]
You didn’t like that segue?
Richard Taylor:
[00:27:02 – 00:27:21]
- I thought that was. I did, but I just wanted. I wanted to. It was a good segue, so I doffed my cap to you, But I just wanted to, like. I want to set this up. You told me I. I had missed this. You know, I’m aware of the talk of oil reserves, but I’d missed what you’re about to share, and this is pretty sobering. So if anyone wants bad news, turn off now.
Brian Dunhill:
[00:27:23 – 00:27:29]
Good cop, bad cop. I’m always the bad cop. That’s why I’m Danny DeVito right here. You know, we’re.
Richard Taylor:
[00:27:29 – 00:27:30]
We’re back to that.
Brian Dunhill:
[00:27:30 – 00:28:29]
We’ve gone full circle. So America has strategic reserves when it comes to. To. To. To oil. And essentially we’ve been paying attention to what’s going on in the war in Iran. And that’s been driving oil prices for. For the entire year since. Since basically Donald Trump went into Iran and invaded Iran now. Or not invaded Iran, but. But launched a war in Iran. Now all of a sudden, for the first time since 1983, the strategic reserve has gone under 300 million barrels of oil. So that little bit of news helped oil spike up 4 1/2% with nothing really going on in Iran. That becomes important because this indicates we might have a point of inflection where we could have a shortage of oil in the United States of some sort if we don’t actually come to an end of this war.
Richard Taylor:
[00:28:29 – 00:28:52]
I think this is. This is gonna. This is what will end the war. You can put this into context for people. So correct me if I’m wrong here, because you only told me this. We’ve fallen below 300 million barrels for the first time since 1982. That in isolation, obviously sounds bad, but you told me in. Was it March they released, was it 172 million barrels? Is that 172.
Brian Dunhill:
[00:28:52 – 00:28:54]
172 Million barrels of oil.
Richard Taylor:
[00:28:54 – 00:29:04]
So in one month, they released 172 million barrels of oil. And now we have less than 300 million. So that can. That can go very quickly and we can.
Brian Dunhill:
[00:29:04 – 00:29:17]
We can scare you even more, Richard. 100 Million. 100 Million barrels of that strategic reserve are believed not to be usable because the infrastructure is too old.
Richard Taylor:
[00:29:18 – 00:29:24]
Really? Yeah. You mean where it’s stored? They can’t get the oil from where it is to end to whatever. Wow.
Brian Dunhill:
[00:29:24 – 00:29:37]
It’s not usable. Old Infrastructure. So essentially this is why we’re seeing a spike in oil at this point in time. And this is why hopefully we’ll see the administration getting their act together and getting this whole thing resolved in Iran.
Richard Taylor:
[00:29:38 – 00:30:02]
Brian, you. One thing you don’t do in America is you, you f. With their fuel prices. Americans are so unbelievably sensitive to gas prices and groceries, but I swear, gas prices more. So I, I really think this will be the key first. I don’t know how they get out though, because they just made such a rod for their own back. It’s so dumb.
Brian Dunhill:
[00:30:03 – 00:30:08]
They will just have to put their tail between their legs and walk away in some way, shape or form.
Richard Taylor:
[00:30:09 – 00:30:13]
Which means we won’t see Trump do that. Which means Hegseth will go or something, you know.
Brian Dunhill:
[00:30:14 – 00:31:01]
Well, Trump’s already leaving places in food carts, leaving turkey. He knows how to tuck his tail between his legs. Yeah. But I do think that the commodity market, we first watch oil prices, then we watch agriculture prices because any ag items are really impacted with a delay. If that hits the ag items, then we basically know all of these inflation numbers that we’ve been seeing the last couple months that have been surprisingly lower than we expected are just completely ridiculous and we can just throw them out. So we are keeping an eye on inflation, but we are still definitely in the oil players because they’re making money hand over fist right now.
Richard Taylor:
[00:31:01 – 00:31:19]
Yeah, this really is one to watch. I think. I’m partly very apprehensive about that information that pose very badly for the US I think. But I do think that’s the, the catalyst that could hopefully bring this to a conclusion.
Brian Dunhill:
[00:31:19 – 00:31:21]
Do you think November’s the savior for the Democrats?
Richard Taylor:
[00:31:22 – 00:31:30]
Yeah, but, but never, never underestimate a Democrats ability to, to stuff it up for themselves.
Brian Dunhill:
[00:31:30 – 00:31:35]
Yeah, they, they’ll over talk, they’ll over promise until people lose, lose their attention.
Richard Taylor:
[00:31:35 – 00:31:52]
No, it’s not even that. It’s the crazy left who haven’t learned, but the. But, but people have learned. You know, your AOCs and your others are distancing themselves from it. So America needs a solid charismatic centrist who’s a good human being.
Brian Dunhill:
[00:31:53 – 00:31:56]
So wait, are you basically saying Andy Burnham for president?
Richard Taylor:
[00:31:58 – 00:32:00]
You know who I’d love? I’d love Pete Buttigieg. Not gonna happen.
Brian Dunhill:
[00:32:01 – 00:32:02]
Mayor would be amazing.
Richard Taylor:
[00:32:03 – 00:32:04]
He would be fantastic.
Brian Dunhill:
[00:32:04 – 00:32:18]
America’s not ready for an articulate president though. He can’t, he can’t, he can’t speak in 140 characters or less. That is his biggest problem. You know, he, he is amazing. But he’s too complex at this point in time.
Richard Taylor:
[00:32:18 – 00:32:31]
He’s great, but it’s not going to happen. Yeah. So I would. Fingers crossed. But I don’t underestimate their ability to stuff it up. So fingers crossed. That was a good one.
Brian Dunhill:
[00:32:31 – 00:32:31]
Thanks.
Richard Taylor:
[00:32:31 – 00:32:34]
Brian. Good to see you. Where can people find you?
Brian Dunhill:
[00:32:34 – 00:32:39]
Everybody can find me @dunhill financial infounhillfinancial.com please drop me a line.
Richard Taylor:
[00:32:40 – 00:32:42]
Okay. And we need to work on the outro.
Brian Dunhill:
[00:32:47 – 00:32:54]
And we will. What was our line? This is not going to be part of it. But what was our line? That was great for me. Richard, how was it for you?
Richard Taylor:
[00:32:55 – 00:33:02]
It was great for me, Ryan. Thank you. I need to work on that as well. Right. Good to see you, mate. And I’ll see you in a month’s time.
Brian Dunhill:
[00:33:03 – 00:33:04]
Sounds great. Thanks so much, Richard.
Richard Taylor:
[00:33:07 – 00:34:05]
All right, folks, that’s another episode of Expat wealth under our Belts. Thank you for listening. I appreciate it. And I appreciate you. If you’re enjoying the show and would like to support the mission, which is to help ambitious expats thrive in America and ask you to subscribe to the POD wherever you listen and also consider leaving a rating and review, this stuff really does matter. Please help us get this information to the people who need it, that is to your fellow expats. Just a quick reminder that this show is brought to you by PUNFA as well. We are a US based financial planner and wealth manager and we help successful American and international families living across the US to make the most of their opportunity and ultimately to retire happier. If you’d like to know more about how we might be able to help you, you can find us on our website, www.planfirstwealth.com or you can look me up on LinkedIn. Do get in touch. We’d love to hear from you. As always, thank you to the podcast guys for their help producing this episode and the entire show. See you next week.
Production