Per yesterday's NYT: "Fears of a wider war were growing on Tuesday after President Trump called for Iran’s “unconditional surrender,” cited the possibility of killing its supreme leader and referred to Israel’s war efforts with the word “we” — all apparent suggestions that the United States could enter the conflict against Iran."
In view of the above rather alarming news item, and as a retired investor who doesn't need a lot more money, I am seriously considering increasing my cash position by reducing my portfolio's equity related holdings. I am curious what, if anything, other investors are planning to do, or are perhaps contemplating doing, if the above fears become reality?
At this time, futures are in a slight downward trend. At my age, I prefer to err on the side of caution.
Comments
It’s never a bad time to reassess how much risk one wants to assume. I pulled back a bit a few weeks ago. But, honestly, it had nothing to do with the state of the world or Tump or war or any economic projections. It was just a realistic appraisal of the risk appropriate at my age. When younger I’d “dumpster-dive” as things fell out of bed believing they’d someday turn around and reward me. But at an older age that’s a harder game to play. So playing it safe.
Nice to see you posting Fred. There’s quite a bit of ongoing discussion in regard to the Mid-East situation running through different threads.
I wouldn't be surprised if the U.S. strikes this site with bunker-busting bombs.
An Iran without nuclear weapon capabilities would be a positive development
but I don't know what the repercussions may be.
I'm very concerned about increased U.S. involvement in this war.
I've not made any portfolio changes because my target asset allocation is within range
and it's unclear how the stock market will react to future developments.
The period of 2000-10 SPY lost close to 10% in 10 years, nothing to do with war.
Several institutions suggest the next 10 year about 5-6% for stocks and 4-5% for bonds, that's great for my style of mostly unique bond funds. I will take 6% for the next 10 years.
Dirty Harry said “the man has to know his limit”
BAMBX appears to be a fund designed for “boomers.” Low risk. Low return. Less stressful than walking around the block, getting dressed or climbing out of bed. But more exiting and potentially profitable than cash. Expensive too!
The Gulf War started in Mid-January 1991 and the SP500 went up over 25%.
Surprisingly, markets are nervous before the actual war but not after the start because there are no more unknowns. It was clear the US would win the war.
https://schrts.co/TTZMpgVH
BTW, EIS=Israel ETF is up 5% since the beginning of the war last Friday, June 13.
https://www.history.navy.mil/our-collections/art/exhibits/conflicts-and-operations/the-gulf-war-1990-1991--operation-desert-shield--desert-storm-.html
And BTW. We already mentioned the action of the Israel stock market here the other day
https://www.mutualfundobserver.com/discuss/discussion/64151/israel-stock-market-closes-at-all-time-highs#latest
It seems to be coming down to the question of the underground centrifuge enrichment installation at Fordow. That might be disabled by the US with the 30,000 lb "bunker buster" bombs. Another option would be some sort of land-based assault operation by Israel.
Iran might be severely weakened with respect to external operations right now, but isn't it likely that they would be able to make a land-based assault on Fordow so expensive in Israeli casualties as to be unacceptable?
Unless some other state decides to ally itself militarily with Iran, isn't it just a matter of time until...
• Israel gradually eliminates virtually all of Iran's long-range offensive capability?
• Wouldn't that would remove major concern about Iran effectively retaliating against any state assisting Israel?
• Wouldn't that pretty much allow the US to effectively take out Fordow without much fear of retaliation?
I do prefer that Iran does not acquire atomic weapon capability, whatever it takes to accomplish that. Their widespread aggressive military conduct over the past twenty or so years, coupled with an inherently fanatic religious/political perspective makes their leaders unacceptably unstable and dangerous.
I've not seen anything that suggests that the present U.S. administration was an active party or accomplice to Israel's "preemptive" attack on Iran. However I do believe that Netanyahu "played" Trump beautifully, guiding him and the U.S. to this almost inevitable very point.
I do believe that with the possible exception of Korea, virtually every major military operation that the United States has engaged in after WW2 has been both unnecessary and morally and financially destructive to the United States. We have been financially weakened to the point where we no longer even have adequate reserve capacity to help defend Ukraine against the Russian aggression.
The last thing that we need is another war. But Iran with atomic weapons? I don't think so.
Almost 100 ships a day traverse the Strait of Hormuz and it's only 20 something miles wide at some points. About 20-25% of the global supply of oil. They could cause significant global turmoil if they want, maybe sink a ship or 3. What would losing 20%+ of the worlds oil supply do? It would also effect them so they might think twice about doing it but if the &*^*( hits the fan you never know.
Using a nuclear weapon would likely be considered suicidal for Iran. Here's why:
Mutual Assured Destruction (MAD): If Iran were to use a nuclear weapon, it would likely face retaliation from other nuclear powers, such as the United States or Israel, resulting in devastating consequences for Iran.
Preservation of the regime: The paramount foreign policy goal of the Iranian leadership is the security and survival of the regime itself. Using a nuclear weapon would likely threaten that very survival due to the inevitable response from other nations.
Avoidance of further isolation: Possession and particularly the use of a nuclear weapon would likely lead to severe international isolation, which Iran seeks to avoid.
In summary, experts generally believe that Iran's leadership is not irrational or suicidal, and therefore unlikely to initiate a nuclear attack that would result in its own destruction. Their actions are primarily driven by the desire to maintain power and the regime's security.
In a more detailed reply, AI admitted that there is always a risk of miscalculation.