war imminent?

今天是初七! Hope everyone had a great Chinese New Year break and enjoyed too many pineapple tarts. 🧧

Now the festivities are winding down, it's time to get serious. Because while we were busy 拜年, one situation has been quietly building in the background.

Let's talk about the US vs Iran standoff and what it means for your money.

🇺🇸🇮🇷 What Is Actually Happening Right Now?

Here is the simple version.

Trump has given Iran a hard deadline roughly 10 to 15 days to agree to a "meaningful deal" on their nuclear programme. His exact words? "We have to make a meaningful deal. Otherwise, bad things happen."

At the same time, the US has been quietly but aggressively moving military hardware into the Middle East. Think 2 aircraft carrier groups, warships, submarines and dozens of fighter jets. This is the largest US military buildup in the region since the Iraq War in 2003.

There were peace talks in Geneva. Both sides called it "good progress." But the military buildup did not stop after those talks. That tells you everything you need to know about how seriously the US is taking this.

As of this weekend, the US military was reportedly ready to strike as early as a few days ago. Trump has not given the final order yet. But they are ready to strike.

🛢️ Why Should Investors Care? Let's Talk Oil

Here is where it gets real for your portfolio.

Iran sits right next to the Strait of Hormuz. Never heard of it? Think of it as the world's most important oil pipeline except it's a narrow stretch of water. About 20 to 21 million barrels of oil pass through it every single day. That is roughly 20% of the entire world's daily oil supply going through a channel that is only about 35km wide at its narrowest point.

Iran has repeatedly threatened to block it if attacked.

Oil markets are already reacting. Brent crude hit a 6 month high this week, jumping about 7% in just 2 trading sessions. That is not a small move.

Now here are the 3 scenarios you need to think about as an investor:

Scenario 1: A deal is reached 🕊️

Trump gets his agreement. Tensions cool. Oil prices could drop back toward $60 per barrel or even lower. Good for consumers, bad if you are holding energy stocks or oil positions.

Scenario 2: Limited US strikes but Strait stays open 💣

A targeted hit on Iran's nuclear or missile facilities AGAIN, similar to what happened in June 2025. Oil prices spike $15 to $20 per barrel in the short term. Markets panic for a few days. Then they recover once it's clear the oil supply is not affected. This is the most likely scenario if a strike happens.

Scenario 3: Full escalation and Strait of Hormuz blocked 🚨

This is the tail risk nobody wants but everyone is quietly pricing in. If the Strait gets blocked even temporarily, oil could surge past $100 per barrel. Energy inflation spikes. Global markets sell off hard. This scenario is unlikely but it is not zero.

🥇 Gold Is Already Screaming "Be Careful"

Gold crossed $5,000 per ounce AGAIN. This is not just about Iran. Gold has been on a historic run (up over 60% since 2025) driven by central banks around the world buying gold aggressively, geopolitical tensions, concerns about the US dollar, and investors looking for a safe harbour.

But the Iran situation is acting like spilling oil on a burning fire right now.

Major banks are not being quiet about this either. JPMorgan sees gold heading toward $6,300 by year end. Goldman Sachs has flagged significant upside risk. Some analysts are throwing out numbers like $7,200 in an extreme scenario.

I have been adding to my Gold positions as a hedge. Not because I am panicking. But because just like what we always said in the air force: "We pray for the best but we prepare for the worst." 🙏

Pete's Take: How I Am Thinking About This 🛡️

A few things I want you to keep in mind as an everyday investor:

One. Do not panic. Markets hate uncertainty. But historically, once geopolitical events are resolved, markets recover. The unknown is always scarier than the known.

Two. This is a reason to review your portfolio hedges. Do you have any exposure to Gold or energy? If markets drop on escalation fears, these tend to hold up or even gain. Think of them as your financial insurance policy.

Three. Watch the oil price closely. It is your real time indicator of how seriously the market is taking this situation. If oil keeps climbing past $75, the market is pricing in a higher chance of disruption. If it dips back, tensions are easing.

Four. Do not try to time this perfectly. Nobody can. Not me, not the big banks. Position yourself sensibly and let the situation play out.

I will be keeping a very close eye on developments this week and sharing my exact positioning and ideas with the SMG community as things develop.

Stay sharp, stay calm. 💹🧧

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Happy Hunting!

Pete
Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.