Investors and the Crisis in Syria

We need to keep in mind the “efficient markets” rule. The financial markets “price in” or account for uncertainties with all that can be known about a situation to that point in time. As the Syria crisis continues to unfold, it will be reflected in the financial markets. As always, as a crisis ebbs, the financial markets will reflect an easing of tensions which increases investor confidence in the markets. Therefore, as markets swing dramatically, investors may want review their current asset allocations against their model portfolios and make adjustments accordingly. Advisors who are vigilant will be viewing their client accounts to determine if the portfolios have become unbalanced due to dramatic market swings. Rebalancing the portfolios will involve buying more units of mutual funds that have declined in value and selling units of those that have appreciated as a result of this crisis. So these crises can represent investor opportunities for financial gain.