If you regularly read our weekly updates, you know that one topic we often discuss is the behavioural aspect of investment management.

Research shows that investors generally face two significant types of bias:

• Emotional biases that typically involve spontaneous decisions driven by personal feelings and psychological influences.

• Cognitive biases which involve decisions based on established beliefs or assumptions that may not be accurate.

Tariffs are back.

And they are bigger. And reciprocal. And disruptive.

Inflation is stickier.

Wars in Ukraine and the Middle East continue to drive energy and food prices higher. The world is less dependent on oil than in the 1970s as green energy has replaced some of the demand, but the strong correlation between oil prices and inflation still exists.

Have you ever wondered why the price of diesel is higher than gasoline?

The war between the United States and Iran has driven energy prices higher. We’re used to hearing about the price of oil, but more and more, we’re hearing specifically about the price of diesel. And, for good reason.

Net exports of diesel and gasoil from Gulf countries averaged 390,000 barrels a day in August, a quarter of pre-war levels. Lower supply and consistent demand? Prices rise.

One of the golden threads that ties all of our weekly updates together – we’ve been writing them for over five years – is the importance of maintaining a diversified portfolio.

It’s worth talking about again, especially today when there are conflicts raging in parts of the world, inflation rising due to tariffs and disruption to oil and gas supplies.

Bonds are often seen as being boring. Maybe that’s because, for decades, they’ve been looked at as the “safer” part of an investment portfolio. By default, that would make a riskier investment such as a stock seem more exciting. Until it isn’t. Because both are equally important when constructing investment portfolios.

“Brent oil price above $96 per barrel….”

This is a headline from earlier in the week. We are critical of headlines like this, because they don’t tell the whole story. Sure, an attack on a sovereign nation in a volatile part of the world will have an impact on the price of oil. Global modern economies are heavily dependent on oil. And not just for electricity and heating.

Being a financial reporter seems like a recession-proof industry. There’s always something to talk about whether this is true or not. That said, this year, of course, wars in Ukraine and the Middle East, rising energy prices, growing inflation, and supply chain disruption as well as tariffs have dominated headlines. This time last year, it was interest rates and the rise of artificial intelligence (AI). Five years ago, it was about recovering from COVID and inflation. Today, especially here in the Great White North (aka Canada), the prevailing news cycle is tariffs, tariffs, tariffs.

This is a somewhat sombre and reflective weekly update. Many readers may recognize the name Irina Dorogan. We recently learned that she passed away unexpectedly in July. Of course, the news came as a complete shock to those who knew her.

Irina joined Cougar Global Investments in 2010 as an analyst, supporting the investment strategies developed by Dr James Breech. By the time I joined Cougar as Head of Wealth Management in 2019, the scope of her work and her responsibilities had expanded tremendously.

Wayne’s Economics 101 lecturer at the University of Cape Town said something that has stuck with him ever since, namely, “There ain’t no such thing as a free lunch” (or TANSTAAFL). Even when something looks completely free, it always has a hidden cost, a catch, or a trade-off. And that price has to be paid.

When I was Head of Wealth Management at an investment management firm, we employed a team-based approach to investment management. Every week, the entire team met to discuss market developments, review portfolio positioning, and determine whether changes were necessary. It was a disciplined process that worked well, and it was important to me that we continue that philosophy when we joined Raymond James Investment Counsel in 2020.