How to Trade Geopolitical Events - DON'T
How to Trade Geopolitical Events – DON'T
As the chart below shows, over the last 80 years, geopolitical events have had, in most cases, very little lasting impact on the stock market. So while it might feel better in the heat of the moment to sell investment holdings and raise cash when one sees headlines about potential military actions, it will likely hurt investment returns over the long run.
The reasons to stay invested are threefold. 1) The stock market is forward looking. By the time a geopolitical event has taken place (like with Russia’s recent invasion of Ukraine), much of the negative news might already be priced in, making it a bad time to sell. 2) Additionally, the problem with trying to time the market is that investors have to be right twice – eventually the investor needs to re-enter the market. If one waits for the all-clear signal, the market is likely to be well above prior highs. 3) Finally, it is very difficult, if not impossible, to predict the investment impact of a war or other event. In some cases, the event in question could end up being a catalyst for positive investment returns. For our clients, we invest in well-diversified portfolios of industry leaders. Due to their competitive moats and fortress balance sheets, our companies can take advantage of the short-term opportunities that can arise from disruptions. In our view, letting great companies navigate difficult environments is a better strategy than trying to overcome the opportunity cost of holding too much cash.
Articles We Liked:
Artificial Intelligence in Poker
An interesting look at how professional poker players are using artificial intelligence to their advantage.
What is the metaverse?
“Metaverse” has become a catchall buzzword for everything from virtual reality video games to working from home. Time Magazine takes a closer look.
Muscular Dystrophy
Professional golfer Morgan Hoffman paused his career to fight his muscular dystrophy with a very unconventional approach. Three years since his last event, he’s nearly ready to return to the sport.
Pyramid Schemes for a New Generation
The Wall Street Journal explores the gold rush of celebrities endorsing cryptocurrency and what it might mean for the future of this nascent asset.
Google Search is Dying
Are ads ruining the Google search experience?
Notable Reads:
The Beginning of Infinity: Explanations That Transform the World
by David Deutsch
Deutsch, whose book The Fabric of Reality we reviewed in October, is a quantum physicist. Unlike Fabric, this book is much lighter on computer science and physics and instead focuses on epistemology – asking how do we gain knowledge? Deutsch comes at the topic from a rational and optimistic point of view and convincingly argues that we are now at the precipice of an era of continual and boundless progress. It was a very long but encouraging read that I thoroughly enjoyed. – AG
Surely You're Joking, Mr. Feynman! (Adventures of a Curious Character)
by Richard Feynman
Written by one of the world’s most revered scientists (Feynman won a Nobel Prize in 1965), the book is a collection of amusing anecdotes from his life. From his experiments as a curious kid up through working on the atomic bomb at Los Alamos during World War II and finally his academic career at Cal Tech, Feynman led an interesting and eventful life. I was most impressed and inspired by Feynman’s intense passion for learning new things – everything from languages (Portuguese and Japanese) to music and art. – AG
Restaurant Review:
Marble Room Steaks and Raw Bar
623 Euclid Ave, Cleveland, OH 44114
We had the opportunity to dine at Marble Room during the National Basketball Association’s All-Star weekend in Cleveland. It was the place to see basketball and other celebrities as well as be seen. (We spotted basketball stars Channing Frye and Damian Lillard.) The opulent, marble-adorned venue is worth visiting any time of year. Marble Room is located in the former National City Bank building, built in 1893 by President James A. Garfield’s sons to honor their slain father. Marble Room’s owners, Millennia Companies, repurposed and maintained the elegant bank’s fixtures including Corinthian columns, the old safe deposit boxes (moved to the bar area), and the bank’s lower level vaults. Known for its steaks, Marble Room has an excellent sushi bar as well. Hamachi Jalapeno Crudo and Tuna Tacos were favorites. Our entrees, Diver Sea Scallops and Sesame Crusted Big Eye Tuna Poke Bowl were also delicious. An extensive wine list and specialty cocktails including a 15-hour Sous Vide Old Fashioned are popular for those wanting to celebrate special occasions. In addition, homespun cotton candy on a paper cone offers a nostalgic treat for celebrants. – MA
More Than A Trusted Investment Advisor
A couple recently came to us to discuss options to help a beloved family employee finance treatment for a major health issue. We offered potential solutions and introduced them to a lawyer in our network who specializes in the implementation of such matters. If you or your family face challenging situations, we are here to help!
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