16 Mar 16th March 2026

Markets Year to Date

There are quite a few signs that tell me we do not really have a reason to fear for our investments. It is easy in times like these to listen to the headlines and believe we are at the start of World War III or a “religious war”.

I have no further insight into how the war in Iran will end than you. I just imagine the possibilities and what that means for my investments.

Total US/Israel win and replace regime with democratic, pro-western government. Stocks fly higher but I give this outcome a low chance.

Protracted, drawn-out, 10 year war. Again a low chance because Trump loses too many votes in the mid-terms later this year. He will want to end it fast.

US announces all nuclear threat has been removed and withdraws. Most likely outcome and world quickly returns to normal. Once again, stocks jump back to their highs.

The only way this turns into a serious problem for our investments is if it drags on, and the oil price rise forces the world into Recession. Remember, Oil at $120 is the first sign of this. It is at $100 now, but just touching $120 isn’t enough. It needs to stay there for a while.

Mind you, there are some other slightly worrying signs this week. US inflation came out at 2.8% annualised. A slight up-tick and GDP came in at 0.7% annualised. That sounds like stagflation, but it really is too early to call.

On the flip side, The S&P is only down 3% this year. That is far from panic selling so I suspect the big boys agree with me and don’t see a major problem yet.

Same cannot be said for retail. There are a number of investor sentiment surveys out there. The Investors Intelligence Bull Bear ratio had been up at 4 but fell to 2.25 last week. A sign retail are scared. The level of 2 is often cited as a good time to buy.

If retail are scared then I am more comfortable to hold my longs.

Then we have insider buying. An insider is someone who is involved in the company. Think Directors, CEOs, CFOs, that kind of thing. These guys usually are net sellers. They often receive shares as a bonus package so more often than not they sell some of these shares to gain cash to spend.

But they are also the guys who know the most about what is going on inside a company. So when they buy using their own cash, they are making the statement that there is nothing wrong with their company and they think the market has the share price very wrong.

On average, this year, they have been buying about $86million a week. That jumped to $309million during the first week of the war and to $402million last week.

Insiders are saying share prices are low and their companies are doing just fine.

The impact of this war is mainly the Strait of Hormuz. I have spent the week trying to figure out just how important this is. As far as I can figure it out, about 20% of the world’s oil goes through this strait. China takes about one third of it and Iran is allowing China to continue to pass through.

The oil price spike seems to be all speculation as far as I can figure. The International Energy Association just announced a release of 400million barrels of oil. This is equivalent to around 20 days worth of what moves through the strait. If you take out the one third that goes to China then the IEA has just covered all the oil from that strait for about a month. That should cap prices.

For now, I am waiting to see what happens next. I don’t want to sell my shares because any positive news will result in a violent move higher and I do not want to miss it.

But, if you are concerned then we can help you buy a Put option or two to protect your portfolio. Just get in touch.

Taxing Unrealised Gains

The Dutch recently approved a new tax. 36% tax rate on unrealised gains. I think they have since put on hold. I sincerely hope they scratch the idea, as Labor have toyed with this here and they don’t need any encouragement.

Let’s run through what it looks like.

You buy a stock for $1000 and, because you are a genius, it goes to $2000. That incurs a tax of $360. But you haven’t sold it yet so don’t have any money. To pay the tax you have little choice but to sell some of the stock to raise the funds. The same thing happens for all holders, so everyone at the same time sells and the price crashes to $800.

Year 2. Investment rises to $1200. Again, you get a tap on the shoulder from the ATO asking for $144. So you sell some stock to raise the funds, as does everyone else and it falls to $900

Year 3. Investment rises to $1000. You get asked to pay $36. At which point you give up and sell what you can, ending up with $954.

You made a loss overall of $36, yet the government made $540 from your efforts, and they took no risk and did no work.

If they try to introduce something like this you have two choices. Vote appropriately, or leave.

Warning

Stock values can go down as well as up. It is possible to lose 100% of your investment in a stock. Any advice given by Capital 19 is general advice only and does not take your personal circumstances into account and might not be suitable for you.