Drama is everywhere.
We have the unfolding crisis in the Middle East(Libya, Egypt, Iran and Saudi Arabia), the ongoing sovereign debtworries from countries in the European Union (Greece, Spain and Portugal), and now Japan faces its worse crisis since World War II. The United States still struggles as it emerges from the worst downturn since the Great Depression.
There is no shortage of challenges facing the world today and many investors are frozen waiting for clarity in these times of uncertainty. The problem is, in all likelihood, the world will not settle down any time soon and we will surely continue to see geopolitical shifts and unrest plaguing the investment world.
So what are investors to do?
How is an investor to make these decisions given how fast changing the global environment is moving?
- First, recognize that volatility is not going away anytime soon; it is the new reality. Fluctuation based on headlines is here to stay.
- Second, assess whether the crisis is short- or long-term in nature. As always, time horizon is a a crucial assessment factor.
- Lastly, analyze how great the impact of the condition. Determine how fundamentals will be affected.