The effect of war on investments

No one knows what the future holds

Armed warfare and conflict are reprehensible and terrible. It destroys human lives and is a failure of humans to be able to peacefully resolve political and economic problems.

With matters involving Russia and China vs the rest of the world in the current headlines I’ve been getting a number of enquiries as to what effect war might have on the finance sector in general.

If we look at the list of conflicts throughout history you’ll notice that, unfortunately, there has been and still is a lot of conflict in the world – a very sad state of affairs.

The tragedy of all this aside even with the spectre of war, advanced first world economies tend to tick despite the turmoil. Consider this quote from Warren Buffet in the 1994 Berkshire Hathaway annual meeting:

“I bought my first stock in, probably, April of 1942 when I was 11. And since then, I mean, actually World War II didn’t look so good at that time. I mean, the prospects, they really didn’t. I mean, you know, we were not doing well in the Pacific. I’m not sure I calculated that into my purchase of my three shares. But I mean, just think of all the things that have happened since then, you know? Atomic weapons and major wars, presidents resigning, and all kinds of things… massive inflation at certain times. To give up what you’re doing well because of guesses about what’s going to happen in some macro way just doesn’t make any sense to us.”

The lesson here is to focus more on the quality of what you’re investing in, rather than the noise of what’s happening in the news or in the markets. No one knows what the future holds, quality investments however will stand the test of time.

Happy Investing.

Ben Godfrey, CEO

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ISG Funds Management

ISG Funds Management is a family-run, independent funds manager that focusses on you with access to private sector project and company investments in a safe and regulated way. When you invest in our funds (not currently accepting new investors), you will be investing in medium to large property projects with strong fundamentals in quality locations, or small-to-medium sized businesses with strong prospects and a history of solid performance.