Nowadays in August 2021, we have a similar situation on the stock market to one and a half years ago, in March 2020. Those days I came up with the following investing strategy, which worked very well. I gained the biggest earnings in my life with the described investment strategy. So, let's have a look at Afghanistan's Implications on The Stock Market and utilize the same strategy once again. First of all, have a look at this article to understand the basics of what is explained below better:
Even if nowadays the cause is majorly caused by the situation in Afghanistan, fear, greed, and nervousness of investors will lead to similar behavior shortly.
Afghanistan's Implications on The Stock Market
- Until the situation in Afghanistan becomes boring, we will experience high volatility in the stock market. It will only get boring if none of the western countries intervenes militarily.
- But my gut tells me, Biden is a wolf in a sheep's coat. I suspect, that US carriers are already taking up positions in the Middle East. But that won't impress the Taliban. And the announcement of military intervention against Afghanistan becomes quite likely. This will create a steep, major correction, and drop in the international stock markets.
- Followed by a general upward trend.
Why we may Expect The End of the Pandemic Due to Afghanistan?
Due to the alleged urgency of the international evacuation programs, I expect the announcement of a military strike soon. Western politicians are not really interested in human rights, or a few thousand starving children in Afghanistan. For the price of a single evacuation flight of 1 military airplane, they can provide those kids with plenty of food for several months. These are all shame reasons and pretexts.
However, I still don't understand, why there is so much international engagement in Afghanistan. It can't be that little bit of drug business either, they blame the Taliban for it. In many American states, hemp got legalized, and produce itself on a large scale.
But maybe, politicians have learned. I would be surprised. But on the other hand, we can be very happy about it. This might be a red herring to get the Pandemic out of the news, people's sight, and minds. And that is going to work perfectly to end it, if the lockdowns were ended at the same time, due to the achieved high vaccination rates.
Even if I doubt, that politicians are conscious enough by now and that the UN was able to agree to this strategy. In the end, a military attack won't be necessary anymore. Yes, I believe, it will turn out like that. Then the threat of UN military action will be enough to end the pandemic. And it doesn't matter whether the UN has deliberately planned it that way!
1 to 3 Month Implications on The Stock Market
Until the end of August or latest in September some of the UN Nations will announce a military intervention. And that is how long we will see high volatility in the markets.
Gold and Energy
Gold will be very volatile, mirroring the behavior of oil and energy. So it is a good time for the volatility game described in this article:
Both assets, energy, and gold, will drop dramatically with the announcements of the military strike. The drop of oil and energy will be more dramatic than gold. In those times investors are looking for security, and gold is considered a safe investment during fearful times. That's why gold will recover first, while oil will remain at a low price for a longer period of time, as it did between April and June 2020. As soon as the worldwide end of the lockdowns gets announced, the steady growth of both assets will take place, similar to the recovery after the announcement of the availability of vaccination in October 2020. Then, oil and energy prices will grow faster than gold.
Within one month, as soon as a military intervention has been announced, the transportation, aerospace, travel assets will drop. So, it will be good for you if you are invested in those in your portfolio to sell them on a peak within the next month or open a short position. The worldwide end of the lockdowns in about 2 to 3 months will be the turnaround for transportation because people are hungry to enjoy the freedom of travel again.
The announcement of military intervention will create a short peak of the online services again within the next month. But as soon as the pandemic got out of people's minds there will be a correction of internet-based services. People tend to forget about the news after 1 to 2 weeks, even if some forget even faster. So this will be the cause of the turnaround, correction, and drop, which may be expected in about 2 months.
About the author Klaus Forster