The events in the Middle East have created uncertainty, but the market reaction has so far been measured. Historically, regional conflicts have rarely had a lasting impact on equity markets, and investors are not currently pricing in a worst-case scenario. Oil and gas prices have risen, supporting the energy and shipping sectors, while airline and travel stocks have declined. These are natural market movements during periods of uncertainty.
Diversification is Key
In times like these, it is important to maintain a well-diversified portfolio. We recommend using market reactions to adjust your desired exposure:
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We take profits in sectors such as oil, gas and energy, where prices have risen significantly.
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We look to increase exposure to markets and sectors that have fallen but have strong long-term fundamentals.
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It may also be wise to invest available liquidity that you intend to allocate anyway.
Long-Term Strategy
Our long-term view is aligned with BCA Research: we are underweight U.S. technology and overweight value, dividend-paying stocks and emerging markets. This is a good time to stay committed to the strategy while also being opportunistic in the short term.
Conclusion
Although the situation may worsen before it improves, it is important to remain calm. History shows that markets often recover quickly once uncertainty subsides. We are monitoring developments closely and are ready to adjust the strategy if needed.
Please contact us for a review, comment or sharing of opinion.
Best regards,
Even Krohn-Pettersen
CIO
Tel +47 941 46 559
