Tags: iran | israel | middle east | stocks | oil

Shrug Off Middle East Tensions at Your Own Peril

Shrug Off Middle East Tensions at Your Own Peril
Demonstrators wave a huge Iranian flag in their anti-Israeli gathering in front of an anti-Israeli banner on the wall of a building at the Felestin (Palestine) Square in Tehran, Iran, April 15, 2024. (Vahid Salemi/AP)

Nigel Green By Monday, 15 April 2024 01:22 PM EDT Current | Bio | Archive

A small market relief rally Monday following Iran’s 300-strong missile and drone strike on Israel at the weekend does not mean investors can sit back and relax.

The world is waiting for Israel’s response to the Iranian attack which further fuelled tensions across the Middle East.

But the markets are pretty much shrugging it off on Monday, it would appear.

Brent crude, the international benchmark, dropped 1.3% to $89.31 per barrel on Monday. West Texas Intermediate, the US marker, fell 1.3% also to $84.55 per barrel.

Meanwhile, the S&P 500 was up 0.2% by early afternoon in New York, while the Nasdaq Composite was flat. In Europe, the pan regional Stoxx 600 index closed 0.1% higher.

There seems to be an element of a slight relief rally because, so far at least, Israel’s Netanyahu appears to be following US instruction not to retaliate and risk escalating the situation even further.

However, the situation remains highly volatile and investors who are serious about protecting and growing their capital cannot now just sit back and relax.

Besides the obvious and deeply worrying humanitarian crisis that is continuing to grow, one of the main areas of concern for investors, is that the Middle East, including Iran, is home to a significant portion of the world’s oil reserves, making it a critical player in the global energy market.

Any disruption in oil production or transportation due to conflicts in the region will have profound implications for energy prices worldwide. We have already seen prices surge in recent weeks.

As we’ve seen, the mere possibility of such disruptions often leads to volatility in oil prices, which, in turn, cascades into broader market fluctuations.

For investors, especially those with exposure to energy-related assets, or industries sensitive to oil prices, such as transportation and manufacturing, these fluctuations represent a direct threat to their portfolios.

Oil is the lifeblood of the global economy, serving as a primary source of energy for transportation, manufacturing, and various other industries. Virtually every sector of the economy relies on oil in some form, making it a fundamental commodity that underpins economic activity worldwide.

As such, the fluctuations in its price can have ripple effects across financial markets, impacting investor sentiment, corporate profits, and consumer spending.

Oil prices also have a direct impact on inflation, as they affect the cost of goods and services throughout the economy. Central banks closely monitor oil prices when formulating monetary policy, as changes in inflation expectations can influence interest rates and economic growth prospects.

With, sadly, no end in sight just yet for the tensions to cool significantly in the region, global investors will be seeking refuge in sectors that are less sensitive to geopolitical risks or that may even benefit from such situations

These are likely to include defence, energy, healthcare and infrastructure.

Investors should conduct thorough research, diversify their portfolios, and consider their risk tolerance and investment objectives before making any investment decisions. Additionally, consulting with a financial advisor will provide personalized guidance based on individual circumstances and market conditions.

While a short-term relief rally may offer temporary respite, the underlying risks persist, underscoring the imperative for investors to remain vigilant, diversified, and adaptive to safeguard and to build wealth.

This is not a time for complacency.

London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.

© 2024 Newsmax Finance. All rights reserved.

A small market relief rally Monday following Iran's 300-strong missile and drone strike on Israel at the weekend does not mean investors can sit back and relax.
iran, israel, middle east, stocks, oil
Monday, 15 April 2024 01:22 PM
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