Russia’s invasion of Crimea is “the worst crisis in Europe in the 21st century”, according to British foreign secretary William Hague. Western markets had a nasty wobble early this week as a result. Germany’s Dax index, for instance, lost 4%, its worst one-day performance since November 2011.
Still, market history shows that “geopolitical risks have a tendency to go away” before too long, as Economist.com’s Buttonwood blog points out. And while stocks slump when a crisis first breaks, they are typically higher a few months or weeks later once the uncertainty begins to lift.
Markets dropped for two to [...]
Want to read this article now?
Already a MoneyWeek subscriber? Please log in below.
Not a subscriber? Sign-up now for a 4 week FREE trial to get instant access.