How to Invest During a Crisis: Oil, the Dollar, and What to Do Right Now with Lauren Simmons

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3:47Nicole Lapin:I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand. It's time for some money real.

4:03Nicole Lapin:Oil prices have gone crazy. And yes, of course, this is going to affect gas prices. But the impact could spread way beyond what you pay at the pump. It could create a ripple effect across the global economy. You're about to hear a conversation I had with Lauren Simmons. She's a former trader on the floor of the New York Stock Exchange about where markets are, what's driving this volatility, and what you as an investor should actually be doing about it. But first, a quick primer, because I just want to lay the foundation of what's really at stake before we dive in. As you know, the conflict in Iran is driving up oil prices.

4:34Nicole Lapin:When economists talk about the price of oil, you're almost always hearing about Brent crude. There is more than one type of oil, but Brent crude really sets the price for roughly 80 percent of globally traded oil on the planet. Right now, Brent is high, driven largely by disruptions to shipping through the Strait of Hormuz. How high? Well, Lauren and I talk about that later. But I want to clear up some confusion. You've probably heard that the U.S. exports more oil than it actually uses. So you might wonder, well, why the heck are gas prices going up if we produce our own oil? But crude oil and gasoline are not the same thing.

5:10Nicole Lapin:Crude has to be refined before it becomes anything you can actually use. And here's the problem. The U.S. produces a lot of light crude, but many of our Gulf Coast refineries were built to process the heavier crude from other countries. They literally aren't designed for what we're pulling out of, say, the ground in Texas, a la Landman. Plus, oil is a globally priced commodity. American consumers are fully exposed to global price swings no matter how much we produce at home. There is no just use our own oil option. Higher oil doesn't just translate into higher gas prices. It also means shipping gets more expensive.

5:45Nicole Lapin:Travel gets more expensive. Life gets more expensive. The oil problem doesn't just affect prices. It also affects the value of the dollar, sometimes in good ways, others not so much. In the 70s, the U.S. struck a deal with Saudi Arabia where oil would be priced and traded globally in U.S. dollars. Every country that needs oil needs dollars to buy it. That created permanent, massive global demand for the dollar, and oil exporters recycled their dollar revenues back into U.S. treasuries, letting the U.S. borrow cheaply and maintain reserve currency status for 50 years. So when oil goes up, the U.S.

6:22Nicole Lapin:dollar usually strengthens. But the reason isn't as simple as oil up, dollar up. There are a few steps in between. When oil goes up, inflation pressure goes up. Oil feeds into everything, right? Gas, shipping, food, flights. When oil rises, inflation expectations often rise with it. And then when inflation goes up, interest rates go higher, right? The Federal Reserve tends to keep rates elevated to fight inflation. So then higher interest rates, that means stronger dollar. Higher U.S. rates attract global capital chasing yield. More demand for dollars means the dollar strengthens. That's why the petrodollar agreement is so valuable to the United States.

7:02Nicole Lapin:Countries need U.S. dollars to buy oil. When oil prices rise, global demand for dollars can increase just to transact. But that system is now under serious pressure. China is aggressively pushing yuan-dominated oil contracts. Saudi Arabia declined to formally renew the petrodollar agreement in 2024. The dollar itself has fallen roughly 4 % over the last 12 months. And the first half of 2025 saw the biggest single half decline in over 50 years. A weaker dollar means imported goods just cost more. Inflation lingers and your purchasing power quietly erodes. That means if you have a European vacation to go on, let's say, your dollar is just not going to go as far.

7:45Nicole Lapin:As Lauren and I get into, the value of the dollar has actually been creeping up in recent weeks. But she has some thoughts on whether or not that trend is here to stay. This, though, is a perfect example of contagion. One economic domino that causes all of them to fall. Think Greece in 2010. One country's debt crisis nearly took down the entire eurozone. Right now, economists are watching something similar brew in emerging markets today. Emerging markets like Pakistan and Egypt are net oil importers. Their energy bills are exploding now as oil prices are spiking, and their government debt is largely dollar denominated.

8:21Nicole Lapin:When their currencies weaken, which happens when the dollar strengthens or oil prices surge, that debt becomes harder to service. If those countries default, U.S. banks and institutional investors holding that debt take massive losses. Then the IMF, let's say, steps in. Markets get choppy, and that turbulence finds its way into your portfolio. That's the world Lauren and I were sitting in when we had this conversation. So we get into it and what you can do not just to protect, but also to advance your portfolio. Lauren Simmons, welcome to Money Rehab. I'm so excited to be here, Nicole. So excited to have you.

8:55Nicole Lapin:And it's such an exciting time in the markets. I know people get really scared, but like excitement and fear is kind of the same emotion. There's just like a lot of action going on right now. There is. And I think that this is a really good time to learn, especially if you are a novice investor, like absorbing how the market is moving and what these big and small things are doing to move the market. And this will help, I honestly think, set you up as you go on your investing journey for life. It's such a good point because, you know, the times of recession and we're obviously not in recession are times when the greatest wealth can be made.

9:33Nicole Lapin:So it's a really, really good opportunity to, while it can feel scary and so much of the volatility can rock your portfolio and sometimes you feel like you need a value, even just checking whatever you have invested, even if you're just a 401k girly, it feels like overwhelming. But these are the eras that wealth is created. Absolutely. So what are you looking at right now? All the craziness with the war in Iran. What should we be watching? Oh, I mean, obviously the overall stock market, but really, I think what we should be paying attention to is oil. And specifically, when we look at Brent oil prices today, it is at$107 a barrel.

10:15And while that might have implications on gas, it has implications on the entire global market. And that's what we should be paying attention to. How is it moving? Is it going to continue to go up? For reference, for what if people don't know, usually a barrel oil is around or the past 12 months has been around$65. So for it to jump to 65 to now 107, that is going to have large impacts. And even if the war was to stop today, the legs that it's going to continue to have, at least for the next few months to the fall, we're going to see the fallout from that.

10:57Nicole Lapin:I'm glad that you put that in perspective, too, because when you hear just like in a vacuum that it's above 100 bucks, even my husband, when we were listening to a podcast on this over the weekend, he's like, well, where is it normally? I don't even know. And so it's really good perspective. And when you say Brent, what does that mean? Or what should people be looking at with specific oil prices? Like how should they put all of that into context with the benchmark? Yeah. So Brent oil. So there's two Brent oil being one of those Brent crude oil. And that is what sets the prices of oil per barrel.

11:31And so right now, yeah, it's at$107.

11:34Nicole Lapin:You're obviously in this every single day. If somebody is new to this and they're learning, which I so appreciate, you're not a novice. and you're helping the novices or the first time investors really become smarter about how all of these elements work together because they do. Oil works in tandem with the dollar, right? So how are you watching that? And what do you do on a daily basis to reposition your portfolio or think about repositioning it? Well, I try not to look at it on a daily basis. Really? Well, yeah, because I think there is obviously in real time, there is a lot of noise. But when you are looking at it in real time, you get, you know, hysteric, and you want to make maybe impulsive decisions, not myself, but I think a lot of investors that are more new, they want to make more impulsive decisions.

12:23And you have to, when we're thinking about investing overall, look at the long term, bigger picture. And so what are your goals? What is it that you want to achieve? Yes, we look at the noise. Yes, we reposition if there are catastrophic things that are taking place that I don't mean like, you know, in society, society globally, but in the markets, like, you obviously don't want to deplete what you have started investing or looking at your 401ks, but I wouldn't on a moment by moment react to every noise that is happening. I mean, realistically, if there wasn't so much volatility in the market, you should be looking at your portfolio on a quarterly basis.

13:05But while there are things that are happening in real time, you have to make decisions on what makes the most sense. So if we look, for instance, at oil, which in general, I think the rule, like it's always been a volatile commodity. I think in general, like max, you should have maybe three to 5 % of your portfolio allocated to oil industry or to energy. Yeah. And any commodity. Yeah, I would say in general, because a lot of them are volatile but oil specifically like that their history there's no unless you are someone who is investing to time the market and you feel like you're great at doing that no we're not about that life yeah then then there's really no reason to to have such a larger allocation for that in your

13:54Nicole Lapin:portfolio totally worked time in the market it's timing the market every single time a lot of times and yet never any time but when you're looking at it just from a investor perspective like not changing things I want to see where it's moving every day so I can just be more informed how do you think about how oil plays in with the dollar so usually when we're in a crisis right or when there's war the dollar strengthens and in the last several weeks and the dollar has been pretty unstable for the past 12 months but in the last several weeks the dollar has risen about one and a half, 2%. And so we are seeing people having more, putting more money into the US dollar, and that is strengthening at the moment.

14:39But again, for me, as like a long term play, at least, and when I say long term, I mean anything over a year. I don't know if I have that much faith in the dollar, at least for right now. And so for me, I look at other asset classes of where I can hedge and protect myself for the next year, two years, and where else I can grow my portfolio for the time being. Where are you looking?

15:06Nicole Lapin:Because the dollar typically in times like this, you're absolutely spot on. It's considered a safe haven. And during shaky times, people are like, well, the Fed's going to cut interest rates, so the dollar is going to strengthen anyway. But where are you skeptical? I'm skeptical because I'm looking at the bigger picture of the last 12 months. We have had a lot of large institutional investors that have been pulling money out of the dollar, not seeing it as so much a safe haven and putting money into emerging markets. Or we're seeing a boom in the last 12 months of a lot of people putting money into gold and silver, myself included.

15:44I have actually gone outside the rule of 3 % and I've put about 10 % of my portfolio into gold and silver. Now, gold and silver has taken a hit in the last few weeks because of the war. But where I was when I entered last August, which I believe was around$40, it went as high as$97 and has dropped down to$60. But I'm still, you know, at a gain because of when I entered the market last summer, last fall. We don't mourn paper losses around here. Yeah. And so I think and I like looking at the bigger trends. Like where are institutional investors putting their money at? And BlackRock, they do a weekly market commentary.

16:29And they said like many where they're positioning themselves right now, a lot of commodities, a lot of emerging markets. And not to say, again, not financial advice, take everything that I say with a grain of salt, do your research. But it is something to look to. Now, the dollar is treasuries. They are safe and they have, you know, an interest rate right now of around 4%. So it's not a bad play. But when you're looking at what can I, how can I get more bang for my buck? There are other asset classes that you can definitely be looking into.

17:04Nicole Lapin:So do you think that there is still room to grow with? So if you're investing in gold, like maybe GLD, which is the ETF that is going to track gold or what's the silver one? slv and then uh and then ring ring is part of my portfolio yeah all right r-i-n-g ring what does that do it attracts gold as well oh i didn't know that yeah yeah it's cold okay yeah yeah i'm i'm into copper these days but again do your own research yeah i think there's a lot of room to grow yeah absolutely so if somebody is getting into metals for the first time what what are good entryways? ATFs, obviously. And you want to really, again, you want to understand like what your goals are, and what your future is, because there are a lot of some have fees associated with them.

17:56And so you have to look at the pros and cons. But I will say that what I put, okay, I guess the question is today, would I pick up GLD? Yeah, or SLV? Probably not. But that's not But I mean like specifically today because it's been on a decline. So we need to see it stabilize. And I think where we will see it stabilize, it's probably going to be when this war has ceased, which I honestly don't. I can't imagine that this would go on for months. but because it's been unstable because it's been on a decline why would you want to put money that you know at least for the moment isn't as as safe as it could be but i do think yes if i'm thinking about a longer term play for the next one to two years it is something that i want to keep adding to my portfolio dollar cost averaging yes little bits at a time because we can never time the

18:56Nicole Lapin:market, right? So from your trading days, now you're a long-term investor for yourself. You probably experience putting in the first bit as like the smallest amount to sort of test the waters, right? So if somebody's thinking about jumping into gold or silver ETF, and a great point to track the expense ratios. ETFs are generally less expensive than mutual funds. So these are on the lower side, but don't put all your money in there. So like if you had for easy math, like$12 ,000 that you wanted to put in, you wouldn't put all it all right now. You would put like a thousand now and then you would, you know, dollar cost average to get the average of it.

19:40Nicole Lapin:And what do you think about Bitcoin, which is what some say the digital gold, which is down like 20 percent? I think when I last looked at BlackRock's market commentary, which was Monday, the 26th, no, the 23rd, Bitcoin has been the most underperforming asset class out of all of them year to date. So for me, I don't touch it. And listen, I know there are people that will argue me down and saying that I am going to miss out on the future. I miss out on the future. I miss out. It wasn't for me. It wasn't aligned with my financial goals. I have nothing against Bitcoin. I honestly don't track it. But to me, they're just a little too unstable.

20:24They fall too closely to tech. So honestly, if you have exposure in tech, you have tech stocks, you're going to be performing, I think, the same way when it comes to Bitcoin.

20:35Nicole Lapin:Totally. It was supposed to be uncorrelated, damn it. Yeah. And here it is, like moving the same way. So you might as well own NVIDIA again, do your own research. But like what you're saying is that, you know, it's not a hedge for other asset classes. It's been acting. In theory, it should be, which would be great. We all want to hedge our investments. Like when one goes down, one goes up. Cool. But that's not how crypto has been acting. I have been, I'll get on my soapbox for a second, really into the wash sale rule for crypto because right now, as you know, the wash sale rule affects securities.

21:10Nicole Lapin:So stocks are considered securities, but crypto is still considered property. And so you can, which is what I did, I sold my crypto and I bought it right back. so I lowered my cost basis which is not allowed in stocks you have to have like a 61 day of course look back and then look forward you can't do it the day of or 30 days before 30 days after right now this is the rule it probably is going to change but you can take that loss so like if somebody bought it at 100 grand and it's down to 60 you take that 40k loss against 40k of gains as it exists right now. But again, those are strategies that are really case specific and not for everybody.

21:53Nicole Lapin:Not for you. No, not for me. You're like, I'm out. No, no, not touching. I'm sitting that one out. And you've just never been, never, it's never worked for you. You haven't tried. You've not bought Bitcoin, not once, not ever. Not even that one time in college. I'm just kidding. But Bitcoin became like a thing when I started on the trading floor. And there was a coworker that sat next to me and all the men on the floor, because the men were significantly older, they told him that he was crazy. Like, why are we buying Bitcoin? This is not something to put your money into. You're going to lose it all.

22:28And I'm pretty sure that coworker is doing just fine in life now. So I will give him that. And obviously, the earlier that you are into some of these asset classes or any company is always better. But yeah, for me, you know, great for people that do it. I love that for you.

22:43Nicole Lapin:It's good for you. with them it's totally true and to clarify you know i generally suggest like one percent of your net worth if you're gonna play with it yeah you can afford to lose one percent of your net worth but if one percent becomes a hundred that's that's great for them too yeah absolutely do crazy times like this make you miss working in the thick of the action on the floor no not at all but it's i mean it's fun it's it's uh you know such a boys club down there but i do think And it's also a very interesting mindset working, you know, on any exchange floor. I know that you used to report down there.

23:22Play on the floor of the Chicago. Yep, absolutely. They have a different mindset because they've gone through recessions. They've gone through turmoils time after time and time again. So like to the men on the floor, it's always very different. not as much hysteria as everyday people because they've gone through it. They know how the market moves. They know what could help. They're better at forecasting of like what is going to come in the next few months. But the worst thing that I could see happening, inflation rises, feds cuts rates, things become more expensive.

24:00Nicole Lapin:But you were alluding to the idea that you're not entirely sure that the dollar will be the safe haven asset. Do you think that's a real possibility? And if so, then who is the safe haven? Do you think oil is not going to be denominated in dollars anymore? No, no. Who's putting this in your head? So much. I just have so much anxiety in general, clearly. I mean, well, I think everybody right now is having financial anxiety. And it's not just related to the stock market. But what I but I will say overall, that always the key when it comes to investing is making sure that we diversify. Do I think the US dollar right now is a safe haven?

24:43If I'm being honest, no, there's just too much instability for me to feel comfortable. And so I am making sure that I am allocating my portfolio, my investments that are going to hedge, at least for this time. I do think overall, you know, America is amazing. And I think in the long term, yes, the dollar is going to outperform. But right now, and especially as I look at, again, my my my North Star is institutional investors and where are they putting their money at. And when I see large institutional investors taking their money out because they don't think it's safe, I'm going to say that the guys probably know a little bit of what they're doing.