"Your service is great and I enjoy your and Eoin's rational analysis in times of high emotions. Firstly I would like to question you on what sort of investments would do best if we revisited 1973-74 type of market. The second question is I have heard reports that Iranian Ships have entered the Suez Canal. What would happen if there is conflict with Israel at a later time? Would Gold and Oil stocks fall with the rest of the market or would they outperform I know these scenarios might not happen but we are better to be armed with knowledge if these two questions eventuate at a latter time."

David Fuller's view Thanks for the feedback and a very interesting question, partially answered by my initial comments yesterday, referred to immediately above.

In the event of a global recession similar to 1973-1974, which was not all that different in severity from 2008-2009, long-dated government bonds would be the best investment, along with short-dated government bonds and cash. However, long-dated government bonds are a risky hedge today, at least in the West, because yields remain historically low. Also, it would be very unusual to have a second recession of similar severity so soon after 2008-2009.

I believe at least one and possibly two Iranian warships ships have just passed through the Suez Canal, as they are legally entitled to, although it is provocative, especially at this time.

To address your hypothetical question, there can be no doubt that a major military conflict with Israel would be extremely serious. For the record, while the present Iranian regime is certainly not beyond sabre rattling and it is developing nuclear weapons, one has to look well back in history for a time when Iran last started a foreign war. However it has aided regional conflicts in recent years and continues to do so.

I do not assume that gold or oil shares will outperform in the next significant downturn, whenever that occurs or whatever its causes. Historically, gold shares have been notoriously volatile.