As major market indexes hit new highs, the middle east offered a fresh reminder of systematic risk. These undiversifiable risks sparked in the middle east can do one of two things: obstruct growth and/or spark a recession. Hedging your portfolio in a world where geopolitical tensions are high should be your primary priority! If you have been following our column, you’d know we have been taking initiatives months ago in preparation of unforeseen episodes of spikes in volatility. Raising cash and rebalancing some positions that seem overextended is always a great place to start. We always like to take advantage of fear in the market, and now with tensions escalating abroad it gives us plenty of opportunity to do that! With a muted inflation outlook, central banks accommodating stance, historically low interest rates, and a strong domestic consumer; our position continues to stay focused on domestic equities but to be cautious while doing so.

Leave a Reply