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Like you and millions of other investors, I've been following the conflict in the Middle East closely; as the past week has shown, events there have the potential to impact multiple global market sectors.
And, not surprisingly, I've got a couple of important observations that could play a pivotal role in protecting your profits and your capital.
One of the most significant things, in my view, is what didn't happen: Markets didn't collapse. Not all that long ago, markets all over the world would've fallen through the floor the instant news of the attacks in Saudi Arabia broke. This time around, however, the markets displayed remarkable resilience. This strength is important to keep in mind.
Also important, though I'm sure you and I wish it weren't: There will be more attacks. The region is just too chaotic to count on peace breaking out.
And, most importantly for our chat today, there will be strength in specific stocks if the conflict boils over again. That's what we're going to talk about now - how to concentrate your money to protect your capital and your profits...[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Last Monday's Winners Prove My Point
Service sector choices like VMware Inc. (NYSE: VMW) and Adobe Inc. (NASDAQ: ADBE) rose more than 3% last Monday. Mark my words: They will rise again if there are more attacks, because service companies like these don't require unilateral global growth to do well.
Defense stocks we talk about frequently are also great choices right now, including longtime favorites (and, not coincidentally, massive Money Map Report winners) like Raytheon Co. (NYSE: RTN) and Lockheed Martin Corp. (NYSE: LMT). Those jumped nearly 4% on the day.
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And finally, think carefully about how you handle "normally" staid, solid stocks like Procter & Gamble Co. (NYSE: PG) or Clorox Co. (NYSE: CLX). They're likely to get hit as higher gas prices begin to hit consumers' wallets if the situation deteriorates.
Speaking of which, there's a lot we don't know that's going to come out in the days ahead, and those answers - whatever they might be - could have important, instant ramifications for some of the stocks we own.
I'm particularly keen to learn how a country like Saudi Arabia - the world's third largest defense spender - failed to protect critical national infrastructure from attack. It's impossible to say for sure right now, but that answer could very well be an opportunity in disguise. I'll keep watching.
In the meantime, I'd encourage you to take this opportunity to make sure your portfolio risk-management is up to Money Map Report spec, that you have 25% trailing stops in place where applicable, and importantly, that you have a shopping list and some capital to match available in case what has been a remarkably resilient market starts to slip on any troubling news.
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About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.