Middle East Conflict: Implications for Investors
Recent developments in the Middle East have increased geopolitical uncertainty, with potential implications for global markets.
While the human cost is troubling and rightly commands attention, markets tend to focus on the economic transmission channel. In this case, that means energy supply.
We have prepared a short update that covers:
- Why energy markets matter most right now, including the risk around the Strait of Hormuz, through which around 20% of global oil flows
- What history suggests after oil-linked geopolitical shocks, and why market drawdowns are often temporary.
- What we are watching next, and how portfolios are positioned as the “fog of war” begins to clear.
Our client portfolios are built to handle periods like this, with strong diversification, liquidity and flexibility to adjust as the situation evolves. Our underweight position in developed market equities has been helpful recently as volatility has picked up.
We will continue to monitor developments closely and keep you updated. If you would like to discuss how this relates to your portfolio, please get in touch.
Warm regards,
Mackay Private Wealth
General Advice Warning: Any comments in this communication do not consider your objectives, financial situation or needs. Before acting on any general advice, consider whether it is appropriate for you.