Wars and Stock Markets

Wars and geopolitical tensions often send shockwaves across global markets. Every time a conflict erupts - be it the recent Israel-Iran attacks, Russia-Ukraine war, or tensions between India and Pakistan - there’s a temporary panic in financial markets. Investors scream volatility, and uncertainty dominates the news cycle.

But if history teaches us anything, it’s this: markets bounce back. In fact, in India’s case, markets often go up after the initial panic. Why? Because while wars may shake the world, India’s economic story continues to unfold with strength and stability. It’s wiser to view markets in 3–5 year periods, not daily headlines. And this doesn’t apply only to wars. Be it any bad news - markets have seen it all and gone up irrespective. Panic is temporary. Progress is permanent.

We are a young nation with a median age of 28, and a population that loves to spend. A young population, rising incomes, and growing consumption power our economy - not just during peaceful times but even amid global uncertainty. Our domestic demand, digital innovation, and reforms keep the long-term growth story intact. So ignore the macros. Focus on micros. Forget the global noise. Focus on your personal finances.

Here’s the real question: Are you investing enough in inflation-beating assets like equity mutual funds, stocks, and gold?

Because while wars come and go, inflation is the real enemy that quietly eats into your savings. And the only proven way to beat inflation is by investing in growth-oriented assets - equity mutual funds, direct stocks and gold. Not by letting your money sit idle in low-interest instruments.

Here’s what you should focus on:

• Do sufficient systematic investment plans (SIPs) in above assets. Atleast 30% of your in-hand monthly income.

• Increase your SIPs every year. Your income is growing, so should your investments.

• Don’t just stop at SIPs - whenever you have extra cash handy, consider lumpsum investing.

• Have sufficient health insurance to protect your savings in case of medical emergencies.

• Secure your family’s future through adequate life insurance, especially if you have dependents or financial liabilities.

Market dips driven by war or fear may feel uncomfortable, but they’re often opportunities in disguise - for those who stay calm and invest smartly.

Because in the long run, it’s not about timing the market. Your time spent in the market (remaining invested), beats timing the market. Time is the best fund manager. Don’t wait to invest. Invest and then wait. The best time to invest is as soon as you have the money to. The pessimist bear may sound smart, but the optimist bull creates wealth. Scared money never wins.

(The author is a Chartered Accountant and CFA (USA). Financial Advisor.

Views personal. He could be reached on 9833133605.)