How geopolitics affect decisions on investment

War in Ukraine and tension in Taiwan some of the concerns weighing on investors’ minds

- Chor Khieng Yuit

There is no shortage of geopolitical concerns for investors these days, from Ukraine to Taiwan, inflation and plenty besides, but investors need to carefully weigh up when it is right to bail out and when it is right to hold on for dear life.

Mr Sani Hamid, director of economics and market strategy at financial advisory firm Financial Alliance, said there will be people who sell first in times of crisis and think about consequences later.

But these sell-offs are short-lived and history has shown that markets tend to recover fairly quickly, he noted.

The MSCI All Countries Asia Pacific Index, the broadest benchmark of Asia-Pacific shares, fell 1.8 per cent from Monday to Wednesday, the day US House of Representatives Speaker Nancy Pelosi landed in Taiwan, but it rebounded by 0.9 per cent on Thursday.

Singapore’s benchmark Straits Times Index rose almost 1 per cent over the same period.