Is Global Strife a Signal to Sell?

Chart of the Week: Is Global Strife a Signal to Sell?

As gut-wrenching as it is, this is not the first time in history that war has broken out in Europe. Is a major geopolitical crisis always a sell signal?

To help answer this question and provide some context, I hit the history books and marked the onset of military conflicts (or near conflicts). Then I measured the performance of the Dow Jones Industrial Average over the ensuing months. (The Dow is only 30 stocks and doesn’t include dividends, but it’s the longest-running “live” index we have.) What I found was that, on average, stocks were 7% higher six months after the start of a conflict.

It’s certainly possible stocks could decline further—nothing is guaranteed—but six months isn’t exactly a long time to be rewarded for your patience.

Source: Adviser Investments, S&P Dow Jones Indices.

This material is distributed for informational purposes only. The ideas and opinions contained herein  should not be viewed as recommendations or personal investment advice. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

Our statements and opinions are subject to change without notice. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.

Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.

For a summary of Adviser Investments’ advisory services and fiduciary responsibilities to our clients, please review our Form CRS here.

© 2022 Adviser Investments, LLC. All Rights Reserved.

Tags:

Chart of the WeekJeff DeMasopoliticssell signal