6 ways investors can react to the current situation 6 ways investors can react to the current situation 6 ways investors can react to the current situation

6 ways investors can react to the current situation

Saxo Group

6 ways investors can react to the current situation

In times of conflict, like these, it is common that it also affects the financial markets. In general the current situation is very difficult to predict, so make sure that you make an investment strategy that allows you to sleep well at night and then stick to it. Based on that, here are some ideas on what you can do if you are worried about your portfolio.

  1. Time in the market vs. timing the market

    In turbulent times it is a natural reaction to consider selling your holdings and leave the market. But in the financial world there’s a saying that it is better to have long time in the market than trying to time the market. What it means is that it is very difficult for anyone to know when to jump in and out of the market. Missing the good days is usually more expensive than being in the market on the bad ones. The other option is of course to only turn some of your portfolio into cash, which could be a durable solution as well. But just bear in mind that inflation is high and interest rates low, which means that your purchasing power over time is going to fall, if you have your savings in cash.

  2. Diversify your portfolio

    It is always a good idea to spread your investments, but especially in times of conflict, where the risk of economies suffering – especially in Europe this time – is high. Therefore it makes sense to both look at diversification when it comes to different asset classes, but also on geographical regions and industry sectors. When you diversify your portfolio, you lower the risk that one global event will have a massive impact on your entire portfolio. History also tells us that you don’t give up a lot of your long-term performance by diversifying.

  3. Consider sovereign bonds and currencies as safe haven

    In times of turmoil, it can make sense to turn towards the investment assets that are least likely to be affected by what happens. So if you decide to diversify your portfolio, bonds is one place to look. While the idea of a bond is simple, figuring out what to put your money into is difficult because of the complex macroeconomic backdrop. In times like these diversifying is about spreading risk and as such the volatile landscape suggests that you look for long-term sovereign bonds (+7 years) from countries such as the US Treasuries and German Bunds. Another place to look for safe haven is in currencies such as US Dollars, Japanese Yen and Swiss Franc.

  4. Protect with commodities

    Commodities have been a hot topic for the past year and they have only become more prevalent in this situation. While there’s going to be volatility within specific commodities like e.g. oil, broad commodity indices could work as a hedge for both the conflict as well as supply squeezes, interest rates and inflation. It is, however important to note that the current geopolitical landscape means that there’s risk and volatility within almost all commodities. So focus on the broadest possible indices and don’t put all your eggs in the commodity basket, as it will then move from being a hedge to a risk.

  5. Focus on stable equities and momentum

    Defensive stocks, such as healthcare should generally be hit less than e.g. cyclical stocks when economies suffer. Also mega caps, i.e. large companies should weather the storm better than smaller ones.

  6. Defence and cyber security could have upside for the risk-takers 
    There’s going to be a lot of volatility and turbulence on the market in the coming time, but for risk-willing investors looking for sectors with potential upside, it could be argued that defence stocks as well as cyber security stocks should fare well in the coming weeks.

Stay safe
Philip Frijs
Commercial Owner - Investor


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.