Asia, Astronomy, and Market Crash: Your Portfolio Amidst the Asian Chaos
My dear readers,
Yesterday, watching the numbers flash across my screen, I felt like I was no longer in finance, but in astronomy. We were helplessly observing the implosion of a system. The CAC 40 plunging 2.17% to close at 8,394 points, the German DAX tumbling 2.7%... This isn't physics; this is war branding itself onto our economies. The topic of the day, the shadow looming over all our decisions, is that "Asia" which is no longer just a direction on a map. It has become the symbol of a continent on fire, holding its breath as strikes intensify between Iran and a coalition led by the United States and Israel.
Central Asia, a vacuum cleaner sucking in capital
We used to chat calmly about our portfolios, how to give them a good clean, a bit like choosing a top-of-the-line vacuum cleaner for dust. But now, it's the opposite. The region has become a gigantic vacuum cleaner for liquidity, but in the wrong way. Capital is fleeing. And can you blame it? Look at the facts: the death of Iran's Supreme Leader, Ali Khamenei, in Saturday's strikes has created a staggering void. Since then, it's been an uncontrolled escalation. Tehran warns its offensives will intensify, promising that the alarm sirens in Israel will never stop. Meanwhile, the Iranian Red Crescent is already reporting at least 555 dead on the Iranian side.
On the ground, it's a macabre chess game unfolding before our eyes. Israeli strikes are no longer limited to Gaza; they are targeting Hezbollah in the heart of Beirut, forcing the Lebanese government into an unprecedented reaction: ordering Hezbollah to lay down its arms. It's a topsy-turvy world. Meanwhile, the US confirms the loss of six of its soldiers and, in an incident as tragic as it is revealing of the surrounding chaos, three of its F-15 fighter jets crashed in Kuwait, victims of "friendly" fire.
Stock market astrology failing
So, what do you do when the models of financial astrology no longer work? When the star charts we had patiently drawn up for 2026 are torn to pieces by raw geopolitics? Some of you, loyal readers, ask me: "Should we sell everything?" The answer is no. You need to reallocate. Yesterday, gold rose 1.68% to flirt with $5,335 an ounce. Oil, for its part, jumped nearly 7%. It's the market's Pavlovian reflex in times of war, and it's not wrong.
But let me tell you what really worries me beyond the raw numbers.
Here are the three warning signals I'm watching this week:
- Paralysis in the Gulf: Qatar had to suspend its LNG production. When the world's energy tap shuts off, the entire European value chain shivers, and all our industries suffer.
- Expansion of the conflict zone: Strikes have been reported in Dubai and Abu Dhabi, explosions in Bahrain. The "safe haven" financial centres of the Gulf are no longer safe. Money is now seeking more distant and less liquid shores.
- The European diplomatic front: France, Germany, and Great Britain say they are ready to "work with the United States" to counter Iran. Translation: our already strained budgets will have to find money for defence—money that won't be invested in our businesses, innovation, or growth.
Asia, this new unstable centre of the world
Let's circle back to our magic word "Asia". In astronomy, we observe black holes by the way they bend light. In economics, we observe black holes by the way they divert capital. Right now, anything that even remotely resembles Asia Minor or the Middle East is a black hole. Money gets sucked in and doesn't come back, or if it does, it comes back transformed into a frantic flight to safe havens.
Don't get me wrong. I'm not predicting the apocalypse. I'm telling you that the era of complacent, moderate growth is over. We are entering an era where geopolitical risk analysis trumps the analysis of the balance sheet. The bear market we're seeing isn't a technical correction; it's a repricing of the global risk premium. And that premium, my friends, is exploding.
So, practically speaking, what does this mean for your portfolio? It means you need to stop gazing at the stars (like in astrology) and start tuning into the shortwave frequencies of geopolitics. It means you need to consider hedges we weren't used to considering. Commodities, gold, certain currencies... But also, and this is my point, you now need to think in terms of scenarios.
Whether you're an institutional investor, a family office, or simply an individual with substantial assets, you can no longer afford to ignore the weak signals. The death of a Supreme Leader, a plane shot down by "friendly" fire, a Saudi refinery catching fire... All of this has a direct impact on your liquidity.
The market is currently a vacuum cleaner for certainties. It sucks in our models and spits back a brutal reality. The reality of a war that is no longer a distant hypothesis, but the daily backdrop on our trading screens. Stay vigilant. And above all, stay liquid. Because in this mess, whoever has ammunition when the dust settles will be able to buy assets at bargain prices. Until then, hang on tight. The journey is just beginning.