The international situation has suddenly changed and the investment pattern is undercurrent. How can ordinary people's wealth be placed?
Israeli Prime Minister Netanyahu ordered an “immediate and powerful” strike on the Gaza Strip on the evening of October 28, before Israel claimed Hamas had violated the ceasefire agreement.
The move marks a severe test for the fragile ceasefire agreement that came into force on October 10.The Gaza Strip Media Office data show that at least 94 Palestinians have been killed and 344 injured during the ceasefire.
01 Geophysical conflict shocks the market
This sudden military escalation instantly stirred up the global financial market.
Historical experience has shown that geopolitical crises often trigger sharp fluctuations in oil prices.The Middle East as a key hub of global crude oil supply, once the scope of conflict expands, the oil production and transport link may be threatened.
In early Asian trading, oil prices surged more than 5% at one point. The market is worried that if the war spreads to neighboring oil-producing countries, global crude oil supply will face severe challenges.
At the same time, demand for safe-haven assets has increased significantly. Traditional safe-haven assets such as gold have become more attractive, and U.S. Treasury bonds may also be boosted.
02 Opportunities in crisis, insight into opportunities
Amid the panic in the markets, savvy investors have begun positioning defensive assets.
Defense ETFs have performed well recently. As the conflict continues and global defense budgets increase, defense contractors are facing new opportunities.
The share price of major defense contractors such as Lockheed Martin, RTX and Boeing rose 2 percent on average in the last trading day. Global X Defense Technology ETF (SHLD) has so far risen to 79.8 percent this year.
Oil assets also face opportunities. Investors can participate in this market through crude oil futures, oil ETFs (such as the U.S. oil fund USO) and stocks of oil producers.
However, it should be noted that the risk of crude oil investment is high, and futures leverage may amplify losses, so risks need to be strictly controlled.
Avoiding risks and protecting wealth
Under the conflict, some industries and asset classes may face negative impacts.
The technology sector bears the brunt. Chip manufacturers (such as Nvidia, Intel) and software service providers (such as Check Point software) with business presence in Israel may be affected.
Israel is a major global drug producer, and any fluctuation in industry-leading Tivoli will affect the global market.
Cryptocurrencies are not a safe haven. Although some believe that Bitcoin has safe-haven properties, crypto-assets are actually at higher risk in this conflict-Israel has frozen 190 Hamas-linked exchange accounts.
Standard Investor Response Strategies
In the face of turbulence, ordinary investors should remain calm and follow the following principles:
Maintaining a balanced allocation of assets is the basis for resisting risks. Disperse funds among different classes of assets to avoid excessive concentration.
Give priority to high-dividend stable stocks, such as central state-owned enterprise stocks and broad-based ETFs, as the ballast stone of the investment portfolio.
In the short term, we can focus on the defense and energy sectors, but we need to be vigilant in chasing high risks and set stop losses.
Avoid blindly chasing market hot spots, don't be influenced by "war speculation" sentiment, and adhere to the long-term investment philosophy.
As Israel and Hamas accuse each other of violating the ceasefire agreement, the conflict is unlikely to subside in the short term. History tells us that geopolitical crises will eventually pass, and rational investors can always pass through cycles and preserve wealth.
Financial markets 'response to geopolitical crises usually goes through several stages: initial sharp fluctuations, gradual adaptation in the medium term, and eventual return of trend. Smart investors don't get lost in panic, but calmly look for opportunities.