Many investors are optimistic and believe that sooner or later the situation will be resolved and everything will return to normal. Therefore, it is better to focus on taking care of investment portfolios.
Although there are dozens of countries indirectly involved in all these confrontations, the great powers are not clashing with each other directly , mainly because of nuclear weapons that today have the capacity to literally end the world and the next generations of living beings.
However, geopolitical experts do not rule out the possibility that global instability will become even more widespread and resemble what last occurred in the 1940s with the Second World War .
However, in the face of this unfortunate and dangerous scenario, many investors are optimistic and believe that, sooner or later, the situation will end up being resolved and everything will return to normal. Therefore, it will be better to focus on taking care of investment portfolios . Now, how to do it?
According to financial advisor Fernando Villar , in the event of a war, the first thing an investor should do is specifically analyze what type of conflict is taking place , how big it is and what particular areas are being affected.
For example, a war in the Middle East like the current one, where there would be a clear impact on the global oil supply, is not the same as a war in leading technological powers or one in the main food producers in the world.
But the analysis should be rigorous so as not to generate erroneous conclusions that force people to sell desperately without solid foundations , especially because the market «overreacts» to such shocking events .
«A person who needs to make that move has to consider the value of the asset they are selling and whether they are really affected or if they are just selling because of the news and will probably recover a few days later ,» Villar said. «I don’t think you have to go out and sell immediately because you could suffer a significant loss ,» he added.
Financial consultant Federico Domínguez went further and concluded that, in the event of a possible and feared Third World War, there would be greater global inflation with large fiscal deficits , a severe disruption in supply chains and a significant impact on the economy of the entire planet.
As a result, stock prices will likely fall sharply at first , but they should recover later , especially in the United States, which has the largest and most important financial markets in the world.
In addition, according to the expert, gold, commodities and bitcoin «should perform well» , as should stocks in countries far from the conflict hotspots , but only once the initial shock has been overcome.
