What to buy in times of war

Strangely, rushing into traditional safe havens may not help in times of war, but your stocks will be fine, says John Stepek. Buy some gold too.

The spectre of war has not been far from the front pages over the past year. Last summer, the big fear was over the US reaction to a nuclear North Korea. Now the biggest concern is that the West will end up further entrenched in Syria, or worse still, that the violence and confusion in that country will trigger a larger battle between the various parties currently in the region. That's not a pretty thought.

The one piece of good news, however, is that if nothing else, you probably don't need to worry too much about what it means for your portfolio. That's because, as Mark Armbruster of the CFA Institute notes, a review of market reactions during the major wars between 1926 and 2013 shows that the impact of war on US stocks was perhaps strangely largely positive, rather than negative.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.