I’m trying to better understand market behavior during geopolitical conflicts. Recently, despite ongoing war-related tensions, the stock market hasn’t reacted as negatively as I would have expected.
Why is the market sometimes bearish during wars, but other times remains stable or even bullish? What factors determine when a conflict actually leads to a downturn versus being shrugged off by investors?
Curious to hear how others think about this and what indicators you watch in situations like this.
Posted by CreamPuff95
4 Comments
never forget that war is actually economically stimulating (if you remember US history, we were in the Great Depression and got out of it partially because of WWII). You need to hire people to make weapons
Only Trump and the Epstein class like Lutnik making money because they manipulate it. It’s irrational. Whenever Tesla or Nvidia beat expectations they push the price down by 30% for no reason. Then like last week the market was supposed to go down because of tensions oil prices ceasefire not holding etc. they bring it up because they’re the market makers they’re the ones buying and selling with billions of dollars while we all lose money
The government foots the bill during war times, but it puts it on their government credit card. All else held equal, this props the economy up, because there’s money flowing (inflation is the side effect). That credit card has to be paid down though, there’s no free lunches. Also war time economies are not conducive to long term economic growth. It’s like trying to stay awake by doing drugs.
The real truth is war is impacting economy as a long term perspective, but you are looking market daily basis, i.e., short term, which goes winding way, with UPs and Downs. You should be used to it.
The media/news is attaching sensational current events, looking very appropriate to the market actions, but it is not real truth for daily fluctuations.
I am seeing this kind of market ever since I actively participating the stock market, i.e., since Dec 2017 and market behaves like this way.
Knowing that this week is drawdown week ahead, I sold all my holdings and moved to cash mode by Friday close.
Even though I stated this drawdown 4% to 4.25% in another blog, I got negative feedback as “a complete lack of accountability or consequence for making shit up”. It is funny some redditian do not like the truth.
I am not giving financial advice to trade, but just sharing for information purpose. I am a trader for the last 8 years and my YTD is 7% to 25% in different accounts.
Good Luck and Happy investing.