Markets are pulling back sharply as the United States carries out an acute attack on Iran soil. Iran’s top brass general Soleimani was killed in a drone strike in Baghdad early in the morning of January 3, 2020. So, how do you manage your money during wartime?
This has sent the markets reeling in anticipation of a retaliatory attack from Iran. The US has advised all Americans abroad to return to the United States. How will this bode for the markets in the upcoming weeks?
As of this writing, it looks as though the markets have shrugged off the majority of their initial reaction to the attack news. What we can expect is further follow through on Monday, given no immediate weekend retaliation. It is important to keep in mind how heavily and extreme movements can be outside of market hours. Inflammatory tweets, posturing, and open threats have had a torrent of effect on the market in the past three years.
And what of World War III? Yes, that is a topic that is currently trending on Twitter, if you have not noticed. You can rest assured that something of a tiff between a country with a military the size of the next seven countries combined versus a country with a military budget roughly 3% the size of the US, will not be aggrandized into war. However, how this bodes for relations with neighboring countries and “Allies” such as Russia and China should be noted and observed.
So how do manage money during wartime? The first thing to do yourself would be to not act irrationally on your own. Until otherwise noted this is not a “Fire Sale” kind of event. There is no need to put your entire net worth into Gold and wait this out. Continue on your course. Keep your stops tight, your positions appropriately sized, and embrace the suck. Until retaliation, this is business as usual.