03.24.26 Clark + Wes: Investing During Global Conflict & Sneaky Risks of Private Credit - The Clark Howard Podcast Recap

Podcast: The Clark Howard Podcast

Published: 2026-03-24T09:00:00.000Z

Duration: 2274

What Happened

Clark Howard and Wes Moss dive into the potential impact of geopolitical tensions in the Middle East, particularly focusing on oil prices and their ripple effects on global markets. They note that while higher oil prices can hurt consumers through increased gasoline and goods costs, certain U.S. states like Texas and North Dakota might see economic benefits. Despite these dynamics, Clark and Wes argue that investors should maintain a long-term perspective, as panic selling during such times can lead to missed opportunities when markets eventually recover.

Wes Moss explains the concept of 'demand destruction,' where high prices lead to reduced consumption, potentially triggering economic slowdowns in regions like Europe and Asia. This could indirectly affect the U.S. economy, but the Federal Reserve is unlikely to lower interest rates in response due to inflation concerns. The hosts caution that wholesale inflation spikes may soon translate into higher consumer prices, reinforcing the importance of strategic investment planning.

The discussion shifts to private credit, which Clark Howard and Wes Moss identify as a growing area distinct from private equity, focusing on non-bank lending to companies. They express concerns about the potential systemic risks associated with private credit, drawing parallels to the 2008 financial crisis. Despite these risks, retail investor participation in private credit remains low, with large institutions holding most investments.

Clark Howard and Wes Moss caution against the allure of high-yield private credit investments, which often promise returns around 12%, labeling them as 'ultra junky.' They highlight the risk of companies unable to pay interest, resorting to PIKs (payments in kind), which can signal financial instability. Business development companies offering yields over 10% are particularly risky, akin to junk bonds, raising the possibility of defaults if a recession hits.

On the economic front, the duo discusses how current banking issues are not as systemic as those experienced during the 2007-2008 crisis. They assure listeners that while Middle East tensions and fluctuating oil prices might cause temporary economic downturns, these are unlikely to last multiple quarters. The key message is to avoid chasing deceptive high-return investments, as such opportunities often carry significant hidden risks.

Clark Howard emphasizes understanding the hidden agendas behind financial advice and highlights the increasing accessibility of financial advice for everyday investors. More fee-only fiduciaries are available, offering unbiased guidance to a broader audience. He underscores the importance of choosing the right financial advisor to navigate these complex investment landscapes.

Key Insights

• Geopolitical conflicts, like those in the Middle East, can cause oil prices to spike, affecting global markets and consumer costs. However, states such as Texas and North Dakota may economically benefit from higher oil prices.
• Private credit, distinct from private equity, involves non-bank lending to companies and carries systemic financial risks similar to those seen in the 2008 crisis. Despite high yields, retail participation is low, with large institutions dominating the space.
• High-yield private credit investments promising 12% returns are considered risky. Companies using PIKs instead of interest payments indicate financial instability, and yields over 10% suggest junk bond status.
• Current global tensions and banking issues are not seen as systemic as the 2007-2008 crisis. Temporary economic downturns may occur, but long-term investors are advised to resist panic selling and avoid risky high-return investments.