Although investors expect wars and international conflicts to have a significant impact on investments, many conflicts have no material influence that matters for investors. Learning how to differentiate between the two types of conflict is key.
Chapter 2 of Geo-economics: The Interplay between Geopolitics, Economics, and Investments examines the types of events that probably first come to mind when we talk about geopolitics: wars and international conflict. Unfortunately, in many cases, wars do not really matter all that much for investors, but in some circumstances, wars can and do have a material influence on financial markets. This chapter will enable readers to differentiate between the two types and provides examples of how big the impact of international conflict has been on markets historically. Because the face of international conflict is also changing, this chapter covers not only traditional wars between nation-states but also the impact of international terrorism on the economy and financial markets.