Well, we were about to push the send button, when Trump decided to start a war in the Middle East. There goes the neighbourhood!

Investing is always about the future. If I invest my money now how much can I expect to receive at some future point in time?

That all changed as of last Saturday.

There is much commentary about the war, the outcomes, who is acting fairly and who is not. Most of us pick a side and maintain that view even though we know "our" side, is not exactly the clean skin in all this.

We are not here to take sides. We are here to determine as best we can what the outcomes for our investment portfolios will be.

We have been concerned and expected increased volatility and with expensive valuations and a myriad of troubles in the United States and elsewhere, we believe markets are going to have a tough time maintaining a relatively low volatile regime.

That means stock and commodity prices will boom and bust over relatively short periods as investors try to guess where the next problem or undervalued assets are.

The war in the Middle East has just started and the ramifications are unknown, but one thing we can assure is as of last Saturday the world has changed irrevocably and the outlook is very cloudy.

The future newsletters will be a little shorter for a while because events will change rapidly and what we say this month may well not be applicable next month. The Signals and Noise and the podcast will keep you posted on the shorter term issues.

This is a long discussion regarding the issues surrounding the development of a western based supply chain for the rare earths and production processes in general.

I recommend you spend some time listening as it encapsulates the whole issue facing the global economy and individual governments.

Sources and Resources

We have spoken about Emerging Markets and we believe they will be a good place to invest over the next decade.

Here is a paper which discusses the effectiveness of CAPE in emerging markets.

The world has spent the last few years discussing the decline of the United States. Much of this is wishful thinking, but countries such as Russia, China, Iran and North Korea have actively sought to bring down the US.

Most European countries and Australia, Canada and other middle powers have been content to let the US do the heavy lifting while they sat back and enjoyed the protection of US military power.

That has now changed. Trump and others have understood the gravity of decline in US power and now are actively seeking to reestablish the United States at the centre of global economics.

Naturally this leaves most others unsettled and uncomfortable with the sudden change, but we can see that many are starting to fall in line behind The United States.

The two sides are becoming clear and as we mentioned a few months ago Australia is militarily committed to the United States while our economic relationship is with a country we could arguably call our number one security concern.

There will be some radical changes required as Australia will need to reorient our economy more towards our allies and away from China.

But we see that as providing us with opportunities to invest ahead of the crowd. We want to be there before others and that is what we will be focusing on in the future.

We will maintain our 3 Wells, but we will also become a little more opportunistic as they arise especially in the commodities sector. With greater volatility we will need to be a little more fleet-footed.

We are starting to see some increased volatility creeping in and with a CAPE at 40, a war raging in the Middle East, we shouldn't be surprised. These simple technical indicators are going to be more useful from here on in and we will make sure we show you how to use them in your portfolios.

VAS is now a whisker from the 200SMA and the US a little higher but not much. These can change quickly.