Why geopolitics should not alter your investment portfolio

In modern times (post-Second World War), wars have had temporary impacts on markets.

The world tends to adapt to these circumstances surprisingly quickly. The supply chain disruptions for food and energy coming from Russia and Ukraine took a while, but is rarely a discussion point in earnings calls anymore as the war rages on.

Ongoing tensions with AI and computer chips amid U.S.-China tensions are another case in point. In general, we do know that wars are inflationary as they increase spending and reduce productivity overall.

Regionally, however, distortions can have a longer-lasting impact. The vast majority of global conflicts have not occurred in North America and have less impact on the largest economy in the world. Obviously, 9/11 was an exception.