Despite significant developments – such as Ukraine’s use of US-supplied missiles on Russian territory and Moscow’s alarming nuclear rhetoric – investors have shown limited reaction, sparking concerns among some about the underestimation of long-term risks.
Nigel Green, CEO of deVere Group, criticized the restrained market behavior, saying the geopolitical landscape is ripe for volatility.
“The combination of growing geopolitical uncertainty, potential tariff adjustments under the Trump administration, the potential return of higher inflation and other global risks, such as tensions over Taiwan, is a recipe for increased market volatility,” he said.
Although U.S. markets initially fell, they quickly recovered, suggesting that investors’ attention may have shifted elsewhere.
“We have already seen these flare-ups in the war in Ukraine (and Israel) and the situation has calmed down with no lasting impact on investment markets. The latest surge feels a bit like positioning on each side before Trump takes power and tries to come to some sort of peace deal or ceasefire,” Oliver said.
“The change in Russian nuclear doctrine has no real impact and whether Putin uses nuclear weapons or not will be determined not by what his doctrine says, but rather by whether he actually feels threatened, which I don’t think is the case at present.”
But for Green, this muted reaction could be a sign of misplaced confidence.
He said any escalation – whether Russian retaliation or increased US involvement – could send shockwaves through risk-sensitive sectors and currencies.
The new administration of Donald Trump could add to the complexity with a resurgence of protectionist policies, which could disrupt global supply chains and fuel inflation.
“Tariffs and trade restrictions often lead to unintended consequences, including higher costs for businesses and consumers. In this environment, companies heavily dependent on international trade or sensitive to fluctuations in commodity prices may be particularly vulnerable,” Green said, emphasizing the importance of defensive strategies like gold and utilities during volatile times.
Despite the risks, Green sees opportunities in this turbulence.
“Companies in sectors such as defense, cybersecurity and energy could benefit from the changing geopolitical landscape. At the same time, increasing volatility can create attractive entry points for those ready to act decisively,” he said.
“Complacency is not an option,” Green said, adding that markets may have responded modestly so far, but “the real test is yet to come.”
“Now is the time to prepare, adapt and stay ahead of the curve. »
