This podcast isn’t personal advice. If you’re not sure what’s right for you, seek advice. Tax rules can change and benefits depend on personal circumstances.
They discuss the impact of geopolitical tensions, from Greenland and Venezuela to renewed focus on Trump, tariffs and trade risks – and how these forces are shaping global stock markets. The episode looks at why gold and defence stocks are back in focus, what recent client activity reveals about investor behaviour, and where risks and opportunities may be emerging.
Use the player icons above to listen on your favourite podcast app, or read the full transcript below.
This podcast isn’t personal advice. If you’re unsure what’s right for you, seek financial advice. Pension and tax rules can change, and benefits depend on personal circumstances. Investments can fall as well as rise in value, so you could get back less than you invest.
Full podcast episode transcript
[0:10] Emma Wall: Hello and welcome to Switch Your Money On from Hargreaves Lansdown. I’m Emma Wall – Chief Investment Strategist.
[0:15] Sarah Coles: And I’m Sarah Coles – Head of Personal Finance.
So, this is your Investment Special. So, obviously, next week, we’ll be back to the Personal Finance – but, for now, there is so much to talk about, with geopolitics playing a massive role at the moment – not just for companies, but also for things like oil and gold. So, it’s having a really big impact on how investors consider the US, and there are plenty of things to weigh up at the moment – plus, believe it or not, Budget speculation has already started.
So, obviously, the elephant in this room – I mean, or the elephant in many rooms – is Donald Trump. So, he’s been keeping you on your toes, hasn’t he?
[0:46] Emma Wall: He has indeed. In fact, Sarah, when you and I planned this podcast – as they do get done a week in advance – we were gonna start and, in fact, talk about Venezuela.
We are only really the second full week into the year and, already, Venezuela feels like ancient history – because, now, what we should be really talking about... instead of the US operation in Venezuela – which we should come onto ‘cause it’s caused some really interesting trading patterns among our clients – and some really interesting market movements – but the hot topic today is the fact that now Trump is threatening tariffs on those that oppose his taking over Greenland – and, indeed, not even ruling out military action.
So, this sort of American exceptionalism – American, I suppose, ‘Land grab,’ if you will – has moved from South America to the Norther Hemisphere.
[1:37] Sarah Coles: So, obviously, tariffs have a huge impact on consumers, but why do they matter so much to markets?
[1:42] Emma Wall: Well, tariffs are, essentially, a tax.
Now, there’s a couple of reasons why they matter to markets. They matter as a tax because they affect the price that you pay for things. So, we’ll start with the US – because that’s where the tariffs are originating from. For the US consumer, tariffs potentially equal higher prices – which equal inflation – which could have an impact on consumption – which, in turn, could have an impact on GDP because the US economy is very much driven by consumers and consumer health – and that, in turn, could have an impact on bond yields – because, actually, if you have a view that the US economy is not gonna do so well, in fact, actually, then owning US debt becomes less attractive – and now, because of supply-demand dynamics, you see bond yields go up.
So, there’s a sort of regional impact – but, more globally, it also causes significant global disruption. You know, we saw that very much on ‘Liberation Day’ last year, when Trump first announced these tariffs – or the first tranche of tariffs, I should say, ‘cause there’ve been many tranches since – and we saw, actually, the considerable impact on global markets that day too.
You know, in ‘Liberation Day,’ we saw Bloomberg estimates had $9.5tn wiped off global markets in 36 trading hours. It won’t be that extreme this time around, but it’s not a surprise to say that, as we are talking – and as we are recording – European markets are down. The US market is closed today – the day that we record – but there is expectation that this will cause volatility in equity markets – and, as I’ve explained, if there’s an impact on prospective economic growth, potentially impact on bond markets as well.
[3:19] Sarah Coles: So, I mean, I think one of the things that we’ve learned from history is that there is a reaction just to the announcement, but we don’t know that the announcement will definitely turn into action, do we?
[3:28] Emma Wall: No, that’s true – and, if we look at the historical context of the last 12 months – because we have had Donald Trump as US President for around 12 months now – there is this concept called ‘Trump Always Chickens Out’ – or the ‘TACO trade’ – which markets have got very efficient at absorbing – and the idea behind this is... Trump is a negotiator – you know, he wrote a book about the art of negotiation.
So, he goes in with a very big headline statement – and that is a very short deadline – that is a very high tariff rate – and, from there, you get negotiation – which is why the UK was feeling rather smug, actually – you know, before – a week ago – at what they’d managed to negotiate – only 10% tariffs across a number of different industries, compared to, say, where Switzerland was – which was 30%, 35% tariffs.
So, after the negotiations suggests that this is Trump’s opening tactic – but the other thing I’d say is, ‘What have we learned about Trump in the last 12 months?’ We’ve learnt he’s a negotiator – we’ve also learnt he’s unpredictable. So, just because Trump has followed a course of events in the past, does not necessarily meant that he’s going to again – and the very decisive action that we saw in Venezuela – with that US military operation – shows that, actually, sometimes Trump does exactly what he says he’s going to do.
[4:42] Sarah Coles: Obviously, markets don’t love uncertainty.
Have they got so used to Trump now that they’re happy with an element of uncertainty that, previously, would have sent them into a tailspin – or, actually, is this level of uncertainty so extreme that they’re gonna struggle to cope?
[4:56] Emma Wall: So, let’s have a look at the market, year to date. I say ‘Year to date,’ we’re only in mid-January – can you believe it?! [Laughs]
[5:00] Sarah Coles: [Laughs]
[5:01] Emma Wall: Normally, a term that you use for your month’s end – but, yes, ‘Year to date.’
We’ve already had quite a few big announcements – operations – from Trump, which has seen significant market rotation.
So, the US operation in Venezuela... we saw some big price rotations in particular sectors – so the Defence sector, Oil Majors, and Gold were really impacted that week. So, on the Monday, the operation happened – and those particular sectors really did see a significant change in their prices – and also in client activity.
So, if we have a look at what our clients did in reaction to that Venezuela operation... we saw, actually, that trades in aerospace and defence stocks were up near 40% versus the annual average, previously. Have a look at trades in oil and gas stocks – they were up nearly 80%. And, if you have a look at precious metal ETFs, trades were nearly up 150+%.
So, you’re seeing real rotation within the market – and investors looking to take advantage of that rotation – but the thing is it’s short-lived. Less than a week later, a lot of those prices had changed again because people take gains, and the market recalibrates what it means, going forward.
[6:12] Sarah Coles: So, clearly, it’s a swift reaction to a change – so how does this fit with the need to invest on the fundamentals for the long term?
[6:18] Emma Wall: Well, the thing is, Sarah – in times like these, the best thing to do is often nothing – and the best investment strategy is often incredibly boring.
So, ...
[6:28] Sarah Coles: [Laughs]
[6:28] Emma Wall: ...markets have been really exciting the last couple of weeks – but, actually, trying to gain these markets is very hard to do. Even professional investors lose money in an environment like this – because, as I’ve eluded to, every 24 hours brings a fresh challenge, a fresh rotation – people taking gains.
If you look at some of the stock examples, uplift in trading activity on our platform – around Rolls Royce and BAE Systems... these two stocks are already coming off the back of significant rally over the last few years – in fact, initially buoyed by the tragic events in Ukraine, when Russia invaded – and so defence stocks benefitted.
So, as a result, a number of these names are already at what we would consider ‘Fair value’ – or, indeed, over-valued. So, instead of trying to play stock-specific names – or sector specifics – we actually think the best course of action in an environment like this is to focus on the long term, and make sure that you have a well-diversified portfolio, which has attributes and no biases – which should mean, actually, you are best placed to weather this kind of volatility, and focus on the long term. As ever, I know you would say, ‘Take advantage of tax wrappers where...
[7:37] Sarah Coles: [Laughs]
[7:37] Emma Wall: ...you can’ – but really try to – as difficult as it is – ignore the noise – because, as I said, trying to time these markets, when they are so volatile, is a near-impossible task.
[7:48] Sarah Coles: When people are building these diverse portfolios, obviously, it’s really important to have a balance in different things – so things like shares – includes things like bonds – but also there’s room for things like gold as well, isn’t there?
[7:57] Emma Wall: There is – and, you know, we set our market outlook for 2026 at the tail end of November – and, indeed, we did a podcast on what we expected to do well – and one of the things we said was we thought that gold would remain to have a place in a well-diversified portfolio – because gold does well in times of uncertainty.
Now, gold did incredibly well in 2025 and 2024 – and past performance is absolutely no guarantee of future returns. In fact, we would be surprised if gold had the same return pattern that it had the last two years. But what it can do is it can provide a ballast and diversification and capital preservation at times when other asset classes are volatile or, indeed, are losing value. So, that’s why we think, in times of uncertainty, a well-diversified portfolio that has equities, bonds – and things like gold – as well as, if you are perhaps more cautious or looking for a more balanced view – upping your exposure to things like gilts – depending on individual risk appetites – is a good way to anticipate and weather the kind of volatility that we’re experiencing at the moment.
[8:58] Sarah Coles: So, obviously, the source of much of this volatility – as we discussed – is Trump.
Now, clearly, the US makes a vast part of the world economy. Is all of this change – and all of this uncertainty... is it having an impact on how investors see the US?
[9:12] Emma Wall: It’s a really interesting question – because, for the majority of the last 10 years, the US has delivered exceptional returns. On a like-for-like basis – versus other parts of the world – the US has been one of the best-performing markets. However, it has been very narrowly driven by Tech sector and, indeed, AI dominance – and it’s really been building on that kind of momentum – and we saw our clients really buy into that story.
So, if you look at the most-bought investments on our platform across 2023 and 2024, you really saw a lot of the US funds – a lot of US ETFs. A lot of US investment trumps dominate those kind of net buy lists. However, one of the things that we’ve seen over the last 12 months – so if you have a look at the 2025-buys – there are still US names in there – but we are beginning to see diversification, because people are beginning to say, actually, they’ve already got a good US allocation – and we’d always advocate having a good US allocation. It is the world’s largest market – so we think it does deserve a place in your portfolio – but, if you’re looking to allocate new cash, we just think there are better opportunities out there – on a number of metrics – on a valuation metric – but also on a certainty metric.
Now is not the time to have all your eggs in one basket. I mean, it never really is with...
[10:26] Sarah Coles: [Laughs]
[10:26] Emma Wall: ...investing – but, particularly now, when there’s so much uncertainty – and so much volatility – spreading your risk across regions, across sectors is a good idea – and we have begun to see clients display those patterns. So, in the top 20 now, we’re seeing gold – you know, we’re seeing some fixed income – some UK investments as well. We’re seeing much more diversification – a which is a good thing. Pat on the back to our clients, actually, for recognising that, in times of uncertainty, you need that diversification.
[10:53] Sarah Coles: I know we could talk about the US for days. I did just want to touch on some of the things that are happening within the US.
So, I think, obviously, the headlines completely, clearly, dominated by a lot of the foreign policy moves – but there’s also been some more domestically-focused announcements that have put the cat among the pigeons as well.
[11:09] Emma Wall: Well, they feel like regional spats – but, actually, they do affect us globally – and what I’m talking about there is the seeming war between the White House and the Federal Reserve.
Now, the reason why I think this is a problem is... the way I explain it is, you wouldn’t really want to invest in a company where the CEO and the CFO – so the Chief Executive Officer and the Chief Financial Officer – were publicly warring – and that’s kind of what you’ve got in the US at the moment. You know, we’ve got a White House that has charged Jerome Powell – so the Federal Reserve Chair – regarding testimony that he made last summer about spending relating to the upgrade of the Fed’s HQ. Are you following? – ‘cause it’s a bit of a complicated story!
[11:53] Sarah Coles: [Laughs]
[11:54] Emma Wall: Jerome Powell has come out, in the last week, and said a video statement – which is quite a bold thing – ‘Yes, these charges have been made against me – but, actually, this is nothing to do with that testimony – and it’s nothing to do with the spending that we did on the building to make it better.’ This is very much about what has been going on for some time – and that is Donald Trump and the wider White House undermining Jerome Powell as Fed Chair – and undermining interest rate policy.
As I mentioned – in the CEO/CFO analogy – this has caused some ruckus in the bond market because it undermines monetary policy in the US. Also, some people have said – which I think is really interesting – is it could actually end up having the counter outcome to what Trump wants. Yes, Jerome Powell does have to step down as Chair this year – because his term as Chair is over – but his term as a member of the voting committee – i.e. the committee that gets to decide on what happens to US interest rates, going forward – is not up... he could hang around for another couple of years. So, actually, you could have a situation where pressure from the White House causes him to dig in – and that’s why it’s causing a lot of concern about what this means for US bond markets, going forward – and, because the US is such a dominant market within equities and bonds, it could have global ramifications too.
[13:09] Sarah Coles: So, there’s loads going on in the US – and there is a risk that we talk about them ‘til the cows come home. But one of the things I wanted to talk about as well was the idea that, already, we’re starting to see some speculation around the Budget.
So, why is this happening so early?
[13:23] Emma Wall: I know – when I saw this story emerge, I couldn’t quite believe it – I thought maybe April 1st had come early. The idea that Budget speculation... we were only free from Budget speculation for around two months – or not even two months – before we get to the merry-go-round again.
But, ultimately, this is all to do with the headroom, which the Chancellor, Rachel Reeves, has created for herself – or, potentially, as this story is suggesting, not created for herself – and that is because, since the Budget, we’ve had a number of items confirmed – or, indeed, cancelled – which could call into question the headroom that she had created for herself... the sort of magical £24bn number – and number one is ‘Costs-associated.’
So, as you know, the way you balance the books – you have more money coming in than you do going out. So, on the money coming in side, there’s been a... naysayers would say, ‘U-turn’ – and members of the party would say, ‘Recalibration’ – but, basically, the rules round inheritance tax – which came in in the Budget 2024 – have been softened. So, those that were around [s.l. business risk relief 14:21], inheritance tax for farms and for family businesses... there’s been some changes there – which impact the amount of revenue that they can generate.
And then, on the other side, defence spending. You’ll remember, really helped defence stocks – but we made a commitment to the percentage of GDP that would be spent on defence.
Well, there’s been some information that’s come out in the last couple of weeks that showed that, actually, what we had in the economy – P&L- the Profit and Loss – was not actually sufficient to cover what we said we were going to spend. So, less money coming in – more money going out – which just already means that the tax-rise speculation for Budget 2026 has begun.
If this was a drinking game – by the end of the year, if we had to take a shot every time you said the word ‘Budget,’ we’d be dead.
[15:05] Sarah Coles: Or completely pickled – one or the other!
[15:06] Emma Wall: [Laughs] Obviously, this is all speculation at this point – although, even speculation – as we have much discussed – does have an impact on markets.
For us, at the moment, looking at bond yields in the UK... last week, gilts had experienced what we had a big drop at the start of the year. So, gilt yields in 2026 were already lower than they had been in the whole of 2025 – in fact, they were back down to yields that we’d seen in 2024.
So, so far, the bond market is sanguine about this potential, but this is a watching brief for us – because, if some of this speculation gets firmed up – or, indeed gets worse, or accelerates – then we would expect to see that impact in the gilt market.
[15:45] Sarah Coles: That’s really interesting. So, we went from the US to the UK... now we’re going even closer to home – because there has been news that HL (Hargreaves Lansdown) is getting a new CEO. What can you tell us about that?
[15:55] Emma Wall: That’s right – Matt Benchener is joining us from the US. He’s relocating himself and his family – so excited is he at the prospect of joining HL. He’s joining from Vanguard – that company that really democratised investing in the US – so very similar to the DNA of HL – a real proponent of personal investing – of growing a retail investor market – which we’re really excited about as well.
So, Matt will take over as CEO in July. He’ll work closely with our current CEO before then, for a few months, to get a really good running start – and Richard Flint – who is our current CEO – will remain in the business. So, we’ll get the benefit of all that Richard has done so far – being the CEO for, by that point, 12 months – and we’ll get Matt as well. Double for your money!
[16:35] Sarah Coles: [Laughs] Well, it is always nice to finish on a positive after so much doom and global upheaval and everything else.
But, before I let you go anywhere, I do want to run a quick quiz question past you – and we are actually gonna go for ‘Gold’ this time.
So, Venezuela – I dunno why I’ve picked Venezuela! – actually has about 31 tonnes of gold held in the vaults of the Bank of England – and, since 2018, it’s been banned from repatriating it.
So, it’s a vast amount of gold – but not for the bank. So, it has thousands of gold bars in its vaults – but how many thousand d’you think it has? I’m gonna give you some clues.
Is it 20,000 – is it 100,000 – or is it 400,000?
[17:12] Emma Wall: I’m gonna go with ‘400,000’ – because it’s been holding gold for a really long time – and I just like the idea – much like that sort of ‘Scrooge McDuck’ character... that, in the vaults of the Bank of England, there is nearly half a million gold bars – am I correct?
[17:27] Sarah Coles: Yes, you’re absolutely right. I mean, very much like ‘Gringotts,’ I like to think, in the Bank of...
[17:31] Emma Wall: Yes!
[17:31] Sarah Coles: ...England. So, yes, that’s quite a lot.
Anyway, that’s all from us for this this week – but, before we go, we should say that this was recorded on 19th January 2026, and all information was correct at the time of recording.
[17:40] Emma Wall: Nothing in this podcast is personal advice – you should seek advice if you’re not sure what’s right for you. Investments rise and fall in value, so you could get back less than you invest – and past performance is never a guide to the future.
[17:51] Sarah Coles: This is not a recommendation to buy, sell, or hold any of the investments we’ve discussed today.
So, all that’s left for us is to thank our Producer, Elizabeth Hotson.
[17:58] Emma Wall: And thank you to you, so much, for listening – we’ll be back again soon. Goodbye!
[18:01] Sarah Coles: Goodbye!