Pod Insights The Clark Howard Podcast 03.24.26 Clark + Wes: Investing During Global Conflict & Sneaky Risks of Private Credit About this episode Clark + Wes: Investing During Global Conflict & Sneaky Risks of Private Credit Is the conflict in the Middle East about to tank your investments? Money experts Clark Howard and Wes Moss sit down for a special "Ask an Advisor" segment to discuss oil prices, the economy, travel price predictions, and most importantly, what to do when the state of the world is making you nervous about your investments. In the second half, Clark and Wes explain the difference between private equity & private credit, and share a major warning about private credit. They break down why "12% yields" are often a trap and how to protect your portfolio from the latest "story investments." Mentioned on the show: What Happens to the Stock Market When Oil Prices Spike? What To Do When the State of the World Is Making You Nervous About Your Investments Investing Rule: You Can't Predict (So Stop Trying) - Clark Howard How Psychology Can Make or Break Your Portfolio How To Find and Choose a Financial Advisor / Best Financial Advisors All this and more on the March 24, 2026, Ask an Advisor episode of the Clark Howard podcast. Submit your questions at clark.com/ask. We hope you enjoy our weekly Ask An Advisor episodes. Let us know what you think in the comments! Learn more about Wes: BOOKS BY WES MOSS Wes Moss, CFP® Wes Moss - Clark.com Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript 0:00 Speaker 00 This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.
0:31 Speaker 01 Low energy, unfocused, foggy? You might be dehydrated. Whether it's hot yoga, over 100 degree weather, or too much sun. Gator Light, with a specialized blend of five electrolytes, was scientifically designed to help move fluids into the body faster for rapid rehydration. Shop now at retailers nationwide. Gator Light hydrates faster than water. Is it in you? Symptoms noted are signs of mild to moderate dehydration. Consult a healthcare professional if symptoms persist.
1:04 Speaker 02 Welcome to Ask an Advisor on The Clark Howard Show with the ultimate advisor here on Ask an Advisor, Clark Howard.
1:12 Speaker 03 It's so cool to be here with you to talk about something that I deal with the perspective of everyday people, you deal with wealthy people who are all concerned about what is going on in Iran, what it's going to mean to their investments, their wallet, what's going to happen with gasoline and all that. So it seemed like a great mind meld opportunity for you and I to address this, you for your wealthy people and me for everyday people.
1:41 Speaker 02 Well, I think it does. This impacts everyone and we're, so we're still in the middle of this conflict that has really big implications. Of course, we're in the middle of a military conflict. That in itself is nerve wracking and scary for markets. And that geopolitical event always hits markets just because of the fear and the uncertainty. And it's a scary period of time. Then the economic implications of that are very far reaching because of the price of oil and the price of oil as that goes up, we know that we immediately see it at the pump, but it also filters through in almost everything else that we don't see. I think of this as we live in a DoorDash economy.
2:24 Speaker 03 Can you imagine being a trucker right now?
2:26 Speaker 02 Yeah.
2:26 Speaker 03 I mean, you look at the prices of diesel and if you think gasoline prices are bad, you try to fill a tractor for a driver driving one of those 53 foot trailers behind him. Diesel, they're not even sure there's going to be enough. The price of that going up, up, up in a way. Think about how many goods show up in our lives that at some point pass
2:51 Speaker 02 Through the petrochemical system.
2:53 Speaker 03 Exactly.
2:54 Speaker 02 Well, I think of it as kind of a DoorDash economy and because we
2:57 Speaker 03 And you said DoorDash. What, what do you mean by that?
2:59 Speaker 02 I mean, well, first of all, think of you get a DoorDash. One, you've got someone now driving, so they have got extra, they're paying more to transport to go get the food. And then every DoorDash order or Uber Eats or whatever service people use, it's a full stack of packaging and the packaging is very, very dependent on petrochemicals. So you think about all the things that get boxed up, shipped, wrapped, sprayed. All of those things are dependent on oil prices. We don't think of that
3:31 Speaker 03 Right.
3:31 Speaker 02 right out of the gate, but they're all impacted by those, those higher costs as well.
3:36 Speaker 03 But you know, one of the weirdest things that is different than the three prior times we had the huge energy supply issues and the prices went crazy. This time it's a mixed bag for the US economy because you got a lot of states that this is going to be great for their state GDP. I mean, they're, they're going to see enormous dollars coming into Texas, New Mexico, North Dakota, Oklahoma, where they live on the energy business and both with natural gas and with oil. This is going to be boom time for those economies, but not everybody in those states.
4:21 Speaker 02 Well, there's a double edged sword though, too, when it comes to producing oil. And there's this thought of what I always think of is when, when do we get demand destruction? Meaning that when we get prices that are too high, then people legitimately start using less, traveling less. It was interesting, just this past week, the CEO of Delta, and I'm waiting for this to be eventually wrong, but what the airlines are saying is that there's still this great demand for travel right now. And people are paying these higher prices because tickets go up, not just at the pump, but the price at the pump for airlines, their jet fuel goes up.
5:02 Speaker 03 Way up.
5:03 Speaker 02 Tickets go way up.
5:04 Speaker 03 Yeah.
5:04 Speaker 02 And the airlines right now are saying, well, we still have this wonderful demand and people are willing to pay, even though the TSA lines are longer than ever. As a traveler, and I know you love to travel more than probably anybody, but at some point, I look at traveling now and I think it's more expensive now than almost ever. The lines are longer, it's harder to get through than ever. I'm going to opt not to be traveling if I can in this environment. So I just don't see the demand for travel continuing to be as strong.
5:37 Speaker 03 You're, you're completely right.
5:39 Speaker 02 And forever.
5:39 Speaker 03 Because we'll last this. We've seen this movie before and the airlines think, oh, everything's great. Or look at our, our booking numbers compared to historical numbers. We're going to be in great shape. And then all of a sudden there is it Wile E. Coyote and the old Road Runner things?
5:58 Speaker 02 And he's running.
5:59 Speaker 03 Out on the cliff and he goes past the cliff and he looks down. That's going to happen if this goes on for a while. And the question is, what's a while? And my guess, I got my guess.
6:12 Speaker 02 What is your guess? I want to hear your guess on, this is the number one question I'm getting. How long is this going to last?
6:19 Speaker 03 And until you end up with this capitulation you're talking about. I think eight weeks.
6:25 Speaker 02 You think it's that quick?
6:27 Speaker 03 I think it's that quick because you know, it's you take a thermometer, you take your temperature, right? And normal for most people, 98.6. People end up in their head with a normal when they drive down the road and they see a fuel price sign. And they're used to it being wherever they live, whatever it is. And all of a sudden now it's higher. And if it happens just for a little bit, people just kind of shrug. But if it goes on for a couple of months, then you start to see the change in behavior. And then let's go to airline ticket prices.
7:01 Speaker 02 That takes a little while, a little longer for people to notice because you're not booking, you're not booking tickets every day.
7:07 Speaker 03 But that's why I think we're in the spring buying season for summer. And people are gonna start shopping around, they're gonna see, wait a minute. It only cost me 314 last year, and this year they want 510. I'm not going.
7:25 Speaker 02 Yeah.
7:26 Speaker 03 And so I think that the airline CEOs have been eating too much of their own cooking. That they really think that, oh, we can defy economics. You can only defy economics for so long.
7:40 Speaker 02 And it is usually, I think of the year in quarters. So it's first quarter, second quarter, which is really kind of goes back to your timeframe, is that anything that is a couple of weeks or a month or two, I think consumers drive through that. You go a full quarter of the year, which is three months, that's when people start to change their behavior. So we're, let's call it, we're roughly a little less than a month in to higher oil prices and this conflict that we still don't have an off ramp for just yet. And I only think that consumers will continue to be fine with their continued spending
8:23 Speaker 02 for, to your point, probably another two months, which would make it a full quarter of the year before you start to see some real economic impact. At the same time, which means that I think that's when the off ramp. Comes or it gets offed. So I would agree with your timeframe, Clark. I think we've got another probably month to two months. Now, we could wake up tomorrow and you could see real progress and it could happen quickly, but I don't see it happening literally tomorrow. I think it's over the course of the next couple of months.
8:54 Speaker 03 So question for you. We're a worldwide market and for energy, we produce enough to serve ourselves, but the rest of the world, Asia, Europe, I mean, they are, they're hurting for certain, you know, natural gas and gasoline.
9:12 Speaker 02 Natural gas prices are up almost 100, over 100%.
9:16 Speaker 03 Isn't that amazing?
9:16 Speaker 02 For some countries.
9:17 Speaker 03 Sure.
9:17 Speaker 02 It's incredible.
9:18 Speaker 03 So they're going to go into recession. I mean, what's happened already is going to bake in a recession. How much is the recession likely in Asia and Europe to affect our economy in the US? Are we really an economic island to ourselves?
9:36 Speaker 02 No, we're absolutely not an economic island. If we start seeing problems in Europe and Asia, which again, it's just a matter of time. How long will it take for these economies to truly slow down due to higher oil prices? And it, once that starts, it always comes back to the United States. You can't have a global, you can't have a recession in Europe and a big slowdown in Asia and have us just sail through. That can't happen. We will eventually have a similar impact. Now, here's the other big thing, and I know that a lot of our listeners, one of the questions we get a lot about is interest rates, mortgage rates, credit card
10:16 Speaker 02 rates, et cetera. This puts the Federal Reserve in a pretty tough spot because at the beginning of this year, it was forecasted or the market thought that the Fed would be lowering rates two times, maybe even three times. That's right now, that's off the table. And the reason is that they have two things to watch, jobs and inflation. And if you have oil going higher, it creeps into all the things that we just talked about. It's not just at the pump, but it's travel, it's transportation, it's home building, it's farming, it's packaging, it's home goods, it's clothing, it's rugs, it's, it's, it filters through the economy and shows up as higher CPI.
10:59 Speaker 02 And if the Fed goes from thinking they tamed inflation to now all of a sudden inflation's running at three and a half, maybe 4%, they can't lower interest rates.
11:08 Speaker 03 And did you see?
11:09 Speaker 02 So that's not a, that's that in itself, if rates stay where they are and go higher, in fact, interest rates have moved higher since we've been in this conflict.
11:18 Speaker 03 Sure.
11:18 Speaker 02 That's something that'll slow down borrowing and costs, which makes costs higher for everyone.
11:24 Speaker 03 Did you see the wholesale inflation report that came out?
11:27 Speaker 02 Yeah.
11:27 Speaker 03 That before impact of anything in Iran, that wholesale inflation has really spiked. And people ask me, what's wholesale inflation? It's what happens business to business before it hits us, but filters, a lot of it filters through to us. So let's go to the core that I think your audience really wants to know. What do you do with your existing portfolio? When we're talking, we've already said recession, we've already talked higher inflation, we've already talked energy supply uncertainty. So a lot of people are like, well, what about me? What do I do? I've worked hard to save this money to invest it. What are you advising on?
12:12 Speaker 02 Well, I, I think that there's a couple of things. We, we never win long-term if we are, every time there's a world issue, or there's a geopolitical issue, or there's a, the worry or whiff of recession, if we just throw up our hands and say, I just need to leave everything in cash. It doesn't work. So we have to have the patience and the horizon, the long-term horizon to say, look, things may get pretty bumpy and we may have a larger market pullback. So far, the market hasn't pulled back that dramatically, despite all the fear and the worry about the war and oil prices. So the market's been relative, it's certainly gone down, but we're not in full,
12:55 Speaker 02 necessarily in full blown correction mode. We're not near a bear market yet, but it's when investors see headlines, get nervous, sell, go to cash in their 401k. What do they, they almost never figure out a good time to get back in.
13:11 Speaker 03 A hundred percent. I mean, we've seen that.
13:13 Speaker 02 So we've got to, we've got to stay the course.
13:15 Speaker 03 Yeah. Every time. Okay. So this is something that my listeners and viewers have heard from me, like a broken record my entire career. And, cause do you know what year I started doing this?
13:28 Speaker 02 1976.
13:29 Speaker 03 87, 1987.
13:32 Speaker 02 I get it back. It's 87.
13:33 Speaker 03 87, which was the stock market crash. It was 40% down in three days, I guess.
13:40 Speaker 02 Incredible. Yeah.
13:40 Speaker 03 And, and my advice, like, nobody knows where a record is anymore, but my advice is the same as it's been all through the years. Know your time horizon. Know you're well diversified. If you're a long way from needing the money, take a chill pill and don't mess up a good thing, even if right now it seems like a bad thing.
14:04 Speaker 02 Couldn't agree more. And, and another thing that comes up a lot in the listener questions that we do here on the, the Ask an Advisor segment on your show, we talk a lot about this concept of dry powder and dry powder is simply having investments that are not tied to the stock market that have a really high degree of safety and stability. And we did a study.
14:28 Speaker 03 Like the latest crypto. Just kidding.
14:32 Speaker 02 Just like, just like a meme, the opposite of a meme coin, whatever the opposite of a meme coin is. And to me, if you really go back over history and there's some methodology behind the amount of dry powder we want in our investments. Because if you go back over the course of history and you look at bear markets, not 5% pullbacks and 10% pullbacks that happen very regularly. The 20 percenters, the bear markets, they happen, let's call it every three to five years. So it's not infrequent, but it doesn't happen every day. On average, it takes about three years for that full cycle to recover. When we do end up going to a bear market, we never know exactly when.
15:16 Speaker 02 So if we have, if someone needs, let's say $50,000 a year and they get $30,000 a year from their social security or other income sources, that retiree has a gap of, let's call it $20,000. They're going to need to pull from their investments. The dry powder principle says that have three years worth of that withdrawal that you need in the overall portfolio. So that would be, for that particular example, $60,000 worth of safety stability. That can be higher yielding money markets. It can be high safety or high credit quality bonds like treasuries or treasury ETFs or treasury funds.
15:57 Speaker 02 And anything in that safety doesn't need to be just in money market, but higher quality bonds, the opposite of private credit. I don't know if you want to talk about that. That doesn't, that doesn't count as dry powder.
16:08 Speaker 03 I think it'd be cool to talk about that after.
16:10 Speaker 02 Let's talk about the private credit too. But these are safety stability areas that are designed on a time horizon to get you through when we go through bear markets so that we don't have to sell our equities that are down at the time.
16:26 Speaker 03 And the other thing that's always been true, when you look at when people bail, when they hit that capitulation point and they bail, it's not when things were at the peak. It's when we're already fairly far in the decline and they give up. So they sell at the wrong time, go to the sidelines till it feels safe.
16:49 Speaker 02 And say, I'm going to wait, wait till things are better.
16:51 Speaker 03 And then they miss after the turn, some of the biggest gains are very early in the turn back north for values. And so that's why I always want you to think about this as.
17:06 Speaker 03 Someone listening to us right now and your pulse is racing to remember you're playing a long game, not a short game. And so often when people get all spazzed out about a decline in the market, decades later, they don't even remember what it was that they got upset about. So what we're saying is take a chill pill, right? The weather's getting better in a lot of the country. Go take, when you're feeling panicked, go out for a walk, hear the birds chirping. Look at the beauty of the leaves changing and the, or you don't call it changing. What do you call it this time of year when, when these new beautiful,
17:49 Speaker 03 gorgeous, green leaves are appearing on trees and all that? I mean, and you see flowers blooming. Just go out and do that and that'll, that'll help you slow down your heart rate and just relax.
18:03 Speaker 02 For our folks in the, the, the north, let's say you're still high up in your latitude versus where we are in the, in the southeast. It is really hard to feel bad about the world when you walk outside and it's 73 degrees and the flowers are blooming and all of a sudden the grasses went from kind of brown green to all green. It's really hard to feel bad about the world.
18:26 Speaker 03 Or just watch a golf tournament on the weekend. If you live somewhere up in the tundra and you see those beautiful lawns and you, you see what we're talking about. And so when things feel bleak, remember they don't stay bleak. You know, just like seasons change, so does the atmosphere for investing. So just take a deep breath, calm, serenity. And if you love yoga, go do yoga, whatever it is, and just do that deep breathing and take it easy and don't do something rash and emotional.
19:04 Speaker 02 Like run out and buy a pickleball paddle and start playing pickleball.
19:09 Speaker 03 Are you playing pickleball?
19:10 Speaker 02 I've played a lot of pickleball.
19:11 Speaker 03 And that noise, some people that noise really, I guess when you're not playing, it may bother you, but not.
19:18 Speaker 02 I think that's what it is. If you are not playing, a, a good friend of mine.
19:25 Speaker 02 Lives near a pickleball park and every time I bring up pickleball or our family I work with, because it's 20, I mean 24 million people play pickleball, 24 million, up 25% over the past year. It's an incredible number of people. It's fastest growing sport in America. The average age, by the way, has dropped. So the average age right now in America of a pickleball player is 38. You get a ton of people.
19:50 Speaker 03 Wait, isn't that exactly the midpoint of demographics in the ICS?
19:54 Speaker 02 That might be it because it's such a big sample set. Maybe that's, maybe that's why. Because it's, it's so common now of people playing and these are people that play more than once a year. So that, they don't count. That's like, if you go, just played pickleball once last year, I think the number is like 39 million, but core players have played at least five times.
20:13 Speaker 03 And are you vicious on the court?
20:15 Speaker 02 No, I'm nervous to get hurt at my age because it's such a almost oxymoron is you think it, this is such a dinky little sport. You go and you see people play and it's kind of ding ding ding. But the injuries are so pervasive because how small the court is and how quick and often you're stopping. And, and I remember.
20:40 Speaker 03 The knee injuries?
20:41 Speaker 02 It's Achilles, all the time.
20:46 Speaker 02 So UBS did a, a report and I made fun of it and they're actually, I retract my statements on this. A couple of years ago that pickleball was going to cost us $400 billion through, because of Medicare costs, because of, now, most of them are outpatient, but the number of injuries and incidents because of this growing sport, this is.
21:07 Speaker 03 You're not selling it. You know, you're not doing a good job.
21:10 Speaker 02 That's why you have to just be careful. You're, if you are 50 and you're going to start to play pickleball for the first time, just remember you're not 18 anymore, even though maybe guys may feel that way. Like, oh, I'm still 21. I'm still holding out for the MLB. You gotta be careful because it's a sneaky sport that can, that can get you hurt if you're not careful. So just don't go, you, we just have fun. Nobody's winning a, an NIL contract at age 50 to play pickleball, but I still think people should do it.
21:44 Speaker 03 Speaking of which, something sneaky that I don't like, I don't think you like either. Can we talk about all the private credit stuff straight ahead?
21:54 Speaker 02 Let's do that. It gets more and more headlines. It's very different than private equity, which you and I have talked about. But confusing because they both have the word private in it, but let's talk about that.
22:04 Speaker 03 But there's also things about both of them that are things I don't like that make them common as well. So.
22:12 Speaker 02 Let's talk about it.
22:14 Speaker 00 This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.
22:44 Speaker 04 Here's a question worth asking. Is your financial advisor always legally required to put your interests first? If you don't know the answer, you need to listen to Talking Real Money.
22:55 Speaker 04 I'm Don McDonald. My co-host Tom and I have spent decades helping everyday investors understand the truths Wall Street would rather you never learn.
23:04 Speaker 04 We're consumer advocates, not industry cheerleaders. We believe in low cost, broad diversification, and keeping things simple. Because complexity is how they pick your pocket. Plus, we answer listener questions on almost every episode, so bring yours. You're already a podcast listener, which means you're just a quick search away. Look up Talking Real Money or visit TalkingRealMoney.com. That's TalkingRealMoney.com. Let us help you build a more secure future by.
23:36 Speaker 04 Talking Real Money is an educational podcast. Hosts are affiliated with a registered investment advisor. For disclosures, visit TalkingRealMoney.com.
23:44 Speaker 05 Low energy, unfocused, foggy? You might be dehydrated. Gatorade Zero powders have been scientifically designed to help improve hydration balance in the body with a clinically proven electrolyte blend and no artificial colors or flavors. Great tasting hydration, no matter where you're going. Shop now online or at retailers nationwide. Gatorade hydrates better than water. Is it in you? Symptoms noted are signs of mild to moderate dehydration. Consult a healthcare professional if symptoms persist.
24:14 Speaker 06 Afternoon glare totally ruined my watch party for the big game. That's when my buddy recommended Blinds.com.
24:20 Speaker 05 With custom window treatments made to fit your style, space and budget, customers who shop at Blinds.com experience overwhelming satisfaction. Side effects may include a fuller, deeper night's sleep and a sudden urge to host the watch party again. Blinds.com isn't a medication, but it can improve how you feel about your home.
24:38 Speaker 06 Shop Black Friday all month long at Blinds.com. Don't miss huge deals dropping every week.
24:43 Speaker 07 Now at Kroger, your points add up to more ways to save every trip. Use them your way to take dollars off groceries at checkout or save at the pump. You can even save up to $35 on your next fill-up. Same points, more choices. And with low prices on fresh, quality food, plus digital and personalized offers tailored to how you shop, your dollar goes further. Redeem your points online or in the app. Kroger, fresh for everyone. Restrictions apply. See site or store for details.
25:14 Speaker 02 Private credit. You and I did a show, in fact, somebody just the other day asked me to send them the YouTube link of the Clark Wes private equity debate. And so-
25:25 Speaker 03 Were we on opposite sides on private-
25:29 Speaker 02 Yeah, a little bit.
25:30 Speaker 03 Okay.
25:30 Speaker 02 Your point was that you're worried about the implementation and all the fees and how if private investments make it into 401ks, it could just be this multi, seven-layer dip of fees, just like we're all worried about. And that is a very real risk and that worries me about it. And I also think that people don't understand private equity. And that was one of your other points. People may not know what they're getting into. So is it really a good- Addition to 401ks.
26:04 Speaker 03 So that, that, what you just said is like the perfect intro to us getting into private credit.
26:10 Speaker 02 Yeah. What's interesting about private credit, and you may have started hearing about this in the headlines, I'd say the last couple of months, it's starting to get more and more top billing. You see CEOs come out and say that the issues we're starting to see in private credit, you shine more light, more light on it, there's going to be lots of cockroaches running all over the floor. But let's just start about what, what it is and how it is different than private equity. What has happened, I think, think of it very simply this way. Private equity is an investment strategy where you're going in and buying non-public businesses. So private companies and you're owning them and you're trying to, to make these businesses more
26:54 Speaker 02 profitable, more valuable over pretty long periods of time. And so think of that as private stock investing, if you will. Private credit is the opposite of that, and it really is all about lending money to companies. And what, what has happened is that regular bank institutions over the past, call it 10 years, have gotten more and more hesitant to lend big money to private companies. So what's happened? There's essentially, this giant industry has grown into the trillions now, a couple trillion dollars, that is effectively a whole nother banking system in the United States that are
27:39 Speaker 02 not banks. And these are private companies that are raising money for loans. So the worry here is that now that this is a two to two and a half trillion dollar industry, if the loans start going bad, is there a bigger worry than, that goes beyond just investors and investors losing money, but could this be another 2008 where a financial system goes and has real problems that creates a systemic issue that again, causes a recession?
28:11 Speaker 03 So that's what's in all the financial press is the worry about this. What's your gut? Is it a systemic risk?
28:18 Speaker 02 First of all, the amount of retail folks participating is still very low on a relative basis.
28:26 Speaker 02 And that's my, always my worry because you get something, and we've had questions here on, on your show about these business development companies that yield 10, 11. Now, because the prices are down so far, they're yielding 12, 13, 14%. Hey, that sounds pretty good. I can just, you've got high quality bonds. Let's call it government, municipal, corporate bonds. I'm going down the credit ladder, if you will. Then you have high yield bonds or junk bonds. Then you've got private credit. So I want people to understand that sure, it's pretty easy to access. You can go out and buy one of these business development companies, like a stock. It's a pool of private loans.
29:09 Speaker 02 And it says on the screen, again, lots of questions about this over the last couple of months. Hey, looks like 10, 11, 12% looks pretty good. Easy to put money in it. Right now, there's only, again, the numbers are, I don't know if these are perfectly accurate. It's around a hundred billion in retail. People buying into these ETFs, BDCs, these business development companies, the trade like stocks, out of an industry that's, call it two to two and a half trillion. Most of the money are in big pension plans and big, let's call it endowments. These, these multi-billion dollar pension funds that have a really long time horizon.
29:51 Speaker 03 But what my thing always, you know, I always go back to what's happening to that individual? Who, I call them story investments. You know, their pitch to them is, this is going to be so much better for you than having your idle cash sitting in a savings account or a CD or in bonds. You're going to make double digit returns and this is so very safe. And there's fee after fee after fee, but we're not going to tell you about those. And when you want to sell, you may not be able to sell. You know, the runs on some of these things where, where they've said, yeah, well, you can't pull your money out right now.
30:30 Speaker 03 So where I go into full freak out mode is I find these are things that are sold, not bought. You know, that there are people with an agenda that want to sell these things to investors and people. Suspend belief. They want to believe that, hey, I'm going to make more than I'm making in the stock market and I'm not going to have the risk with the stock market. Look at this. Isn't this a great country? Till all of a sudden, they can't get their money.
31:01 Speaker 02 Clark, here's how I see it end up really being a problem. It ends up being a FOMO thing. And investors start reading that, oh, I can just buy this pool of capital that trades just like a stock or an ETF that yields me 10, 11, 12%. And that starts to spread, that kind of sentiment. It goes from headline to investor, and then it goes from investor to friend, and then it just spreads. Oh, I can get 10, 12%. That sounds pretty good. And then people start buying. So it's kind of a FOMO, like fear of missing out. Why am I not getting 12%? Nice, steady coupon on my money. So I think that my gut tells me
31:45 Speaker 02 because the industry is still very heavily concentrated towards the giant pension funds and the investment endowments, I think those investors may get hurt, but I don't see it as a systematic bank issue like we had in 2007 and 2008.
32:04 Speaker 03 What about the everyday investor, though?
32:06 Speaker 02 This is why-
32:07 Speaker 03 Now, that's who I'm worried about.
32:10 Speaker 02 This is why I think it's good that we're doing on the show. For now, the individual investor hasn't gotten nearly as caught up in this, if you look at the numbers, as other trends that I've seen, because it's still relatively nuanced. It's still only been the last couple of months. And a lot of the headlines in the last couple of months are about the dangers of private credit. Ultra, think of them as ultra, ultra-high-yield bonds. They're ultra junkie in a lot of cases. So I think that our message here today is just be very careful. You see a yield of 12%, a steady yield of 12%, that means there's a ton of risk in the underlying companies these institutions lent money to. And there's
32:55 Speaker 02 more and more reports of these companies not able to pay the interest. So they're doing something called PICs, P I Ks, payments in kind, which being the payment is just that they stack on the interest they owe.
33:07 Speaker 03 The IOU.
33:08 Speaker 02 IOU, IOU. And isn't it
33:11 Speaker 03 Would you like me to write out an IOU to you? I'll take some money from you.
33:14 Speaker 02 Aren't IOU is just as good as money? On a post-it note?
33:19 Speaker 03 Actually, not to me.
33:21 Speaker 02 You're going to want to hold on to this. You're going to want to hold on to this IOU. So, so I would say buyer beware. Understand that anything that is a business development company, and there's a lot of them out there, anything with a yield in the world we live in today, anything with a yield of over about 5%, you're starting to increase credit risk. You go over 10%, you're talking about really junky junk bonds.
33:46 Speaker 03 You're talking about the chances you're going to get back 100 cents on the dollar. Not good at all. And some of these are going to turn out to just go bust.
33:57 Speaker 02 Depending.
33:58 Speaker 03 Because of all the capital calls, you know, people who've been trying to get their money.
34:03 Speaker 02 Particularly if we go into recession, which I still think my gut tells me, and go back to earlier in the show, that the issues in the Middle East, oil prices, it's going to go on longer than we want. And oil will stay higher longer than we'd like. But I, I don't think it lasts multiple quarters of the year. I think it is, to your point, I would agree, a couple of months. And then we get some resolution. And the investors that bailed out and thought this would go on forever. And it, things just continue to get worse, which I can, you can easily extrapolate that right now. I think those investors will be, they'll be disappointed that they bailed out when the world all of a sudden starts to get better again.
34:46 Speaker 03 Well, I want to circle back for one second to private credit before we put it to bed here. And it's something you and I have seen all through the years. And that is that there's always going to be a pitch that you're going to hear as an investor for the shortcut. That's going to get you richer, quicker, easier.
35:09 Speaker 03 And we're all susceptible to wanting that shortcut. And that's when we get burned. And so, right now, we're talking about private credit. Next year, there'll be something else. Last year, two years ago, it was the, um, what they called the memes? The made up, the joke kind of coins?
35:29 Speaker 02 Oh, NFTs.
35:29 Speaker 03 Oh, and the NFTs before that, that was like four years ago.
35:33 Speaker 02 Yeah.
35:33 Speaker 03 And there's always gonna be something like that because people are like, you know, I'm having to go to work every day. I got these bills coming in every month.
35:43 Speaker 02 Easier just to?
35:43 Speaker 03 Isn't there a way I can just get around this and, and, uh, jump? What's the expression? Is it jump? Is it, I call jump the shark. Which jumps the shark?
35:53 Speaker 02 Yeah, jump the, yeah, jumping the shark. Maybe it means?
35:56 Speaker 03 I don't know.
35:57 Speaker 02 You think you can leap over, but the shark just grabs you?
36:00 Speaker 03 I don't know. I have never, I have never gotten an analogy right.
36:04 Speaker 02 Shaking.
36:04 Speaker 03 Never gotten an analogy right in my life. But you get the idea that when we get ourselves in trouble is when we're looking for that gimmick. That thing that allows us, like private credit, to somehow magically, without risk, we're gonna get three times the return on our money? Yeah, right. No.
36:28 Speaker 02 It always works for a little while until, going back to your earlier analogy, that was a good one. All of a sudden, the coyote's running and running, ran off the cliff and there's nothing below. So, so let's wrap it up there. But I think we covered a lot of the, the major issues in the world. The war, our, our wallets, our investments. Beware of returns that are too high, too good to be true, often are too good to be true. And, uh, this is a really good, this is a very important Ask an Advisor segment because we had the ultimate advisor here on the show. His name's Clark Howard.
37:02 Speaker 03 No, no, you are the ultimate advisor.
37:04 Speaker 02 All right, thank you.
37:05 Speaker 03 Anyway, one thing I had to make sure was people know I am not a financial advisor.
37:11 Speaker 02 Well, so what?
37:11 Speaker 03 I'm just, I'm just.
37:13 Speaker 02 You're a consumer advocate.
37:14 Speaker 03 I am just a regular dude. That's what we should call me, the regular dude.
37:19 Speaker 02 I still like the Clark Howard Show, but.
37:21 Speaker 03 You like Clark Howard Show, okay. So I'm just, I'm just the advocate for everyday people who in their lives, they're not the people who can afford to hire, you know, a fiduciary fee only financial planner. They're on their own and a lot of times they'll hear, like you were talking about, they'll hear somebody say something and it's my job to say, whoa, whoa, whoa, whoa, let's think about this. What's the hidden agenda here? Who's really benefiting from this? Like I always talk about with, is it okay to cuss on your podcast and say the word annuity?
38:01 Speaker 03 I always talk about with.
38:02 Speaker 02 I really thought you were gonna.
38:04 Speaker 03 That is a cuss word. So let's talk about Clark cuss words. Full price, retail, annuity. What else?
38:12 Speaker 02 Any other?
38:13 Speaker 03 I think that's pretty much it.
38:14 Speaker 02 Any other four letter words?
38:16 Speaker 03 But, but the point is, I am not what you are. I am not a professional at investing.
38:24 Speaker 02 The one thing too, I would note to our listeners and viewers is that there was a time, and not that long ago, that it was kind of impossible to find financial help if unless you were quote, what, super wealthy. Every year that door opens up further and further to more and more people. And even if you're a teacher and, and you've got, you just started your 403B contributions, you do have access to advice and you should have people coming in and educating you on your, your retirement plan. And more and more companies and advisory firms have folks dedicated to helping people that don't have multi, multi millions of dollars. So there are fee only fiduciaries that are able to do that.
39:09 Speaker 02 That is the good news. So you may be a regular guy watching out. I'm a regular investment advisor who's a fiduciary, trying to do the same thing as well.
39:19 Speaker 03 Great.
39:24 Speaker 06 Afternoon glare totally ruined my watch party for the big game. That's when my buddy recommended Blinds.com.
39:31 Speaker 05 With custom window treatments made to fit your style, space, and budget, customers who shop at Blinds.com experienced overwhelming satisfaction. Side effects may include a fuller, deeper night's sleep, and a sudden urge to host the watch party again. Blinds.com isn't a medication, but it can improve how you feel about your home.
39:48 Speaker 07 Shop Black Friday all month long at Blinds.com. Don't miss huge deals dropping every week. When you shop pickup at Kroger, you can expect the savings you love and fresh groceries selected just for you. Our associates are committed to getting every detail right, carefully handpicking your items, checking for quality and freshness, and packing your order with care. Because bringing you fresh, quality groceries is what we do best. And right now, enjoy $20 off your first online order of $75 or more. Restrictions apply. See site for details. Kroger. Fresh for everyone.
Previous 03.23.26 SAVE MORE On Gasoline And Printer Ink Next 03.25.26 Home Insurance Spy Drones / K-Economy Price Patterns Page updated November 6, 2026 · transcript and summary are machine-generated
