middle east conflict: an update from our investment team

For the past six months, we have closely monitored the ongoing geopolitical risks and the potential impact they could have on investment markets.

The market’s reaction to the recent strikes was kept to a minimum with no significant volatility experienced at the time of writing. But should the situation in the Middle East worsen, stock markets could see larger movements.

We’ve constructed our funds and portfolios accordingly, aiming to mitigate and minimalise the impact of any volatility.

Our investment strategies include a number of assets designed for diversification – for example gold, long-dated government bonds and increased levels of cash. These should help guard our investments from the worst of any resulting market falls. 

It’s very normal to see some volatility in markets in the days following geopolitical flashpoints. Previous similar events on the S&P 500 index – the 500 largest companies in the US – show that 5-10% selloffs can occur as a result. But markets have on average recovered with double-digit returns over the following 12 months.

Fahad says: “While there may be some reactive movements to equity markets in the short term, we stay true to our disciplined philosophy and framework as long-term investors. We’re focused on making the most of positive market moves and seizing opportunities, but also being well-positioned should markets temporarily drop.”