Lawyers love to hear their clients say that they want to fight a case “as a matter of principle”, as this invariably means that it is no longer necessarily about whether or not the fight is winnable, but that their client believes it is morally indefensible not to try to uphold their point of view. A potentially negotiable and often complex argument is reduced to an absolute and a binary outcome – win or lose.

When dealing in absolutes, as is the case with the war in the Ukraine (where neither side has even posited a reasonable outcome as an off-ramp to the conflict) and now also more recently the horrific attacks in Israel and the resultant backlash in Gaza, resolution seems a dim reality.  

With the death toll in the thousands on both sides of the conflict (and devastatingly, heavily constituted not only by civilians, but woman and children) the Palestinian conflict in particular is made all the more complicated as it is simultaneously a proxy war between Iran (and forces sympathetic to its views) and the West, made more awkward by politicians on both sides denying this point vehemently as they understandably try to avoid escalation.   

Whereas the media now spends much time debating what a morally “proportionate response” on the part of Israel should or should not be, political commentators have noted that the scale of the attack on Israel may have been designed to be precisely large and vicious enough to potentially entice both Western superpowers as well as other players in the middle east to join the conflict.      

The latter point is then also the elephant in the room.  In addition to a terrible loss of life, this most recent conflict has edged the world yet another step closer towards a full-blown war – and this is even before the sceptic in me posits the argument that there would rarely be a better time for China to plan its invasion of Taiwan, were it intent on doing so, than following yet another conflict which draws in both resources and attention from the West.

Despite this potentially dire geopolitical situation unfolding on the global stage, markets have largely been unmoved in the week following the 7 October attacks, with the market debate largely still being centred around whether or not a soft landing or recession seems more likely in 2024.  Although still too early to predict an outcome, the earnings season in the US has kicked off with a lacklustre start, while many market participants simultaneously point to the historic prevalence of a “festive season market rally” which has often coincided with the final quarter.    

Whereas a full-blown (or even materially escalated) war on any of these fronts would undoubtedly more violently shake markets, this is not yet a given. Nobody can predict the future (although market sages will always try to convince us of the plausibility of trying to do so) and in the absence of prediction, the best long-term investment survival strategy has been to remain invested in a manner befitting of one’s long-term goals, whilst remaining respectful of the fact that it is never going to be a straight-line journey.  We sadly do not know exactly when, but market drawdowns will occur – and we will stand ready to upweight risk assets and benefit clients in the long-run once the dust has settled in these occasions.

Trying to time the markets, in contrast, relies on luck and turns out to be yet another battle of attrition – one that history has proven again and again more than likely ends as tragically as its violent counterpart, in which there rarely are any winners.   

Francois Cilliers

24th of October 2023

The opinions expressed in this article are Francois Cilliers  from 2IP and do not necessarily reflect the views of Stone Wealth Management

Share This
0
    0
    Your Cart
    Your cart is emptyReturn to Shop