War, Astronomy and Market Crash: Your Portfolio Amidst the Chaos in Asia
My dear readers,
Yesterday, watching the numbers flash across my screen, I felt less like a finance professional and more like an astronomer. We were powerless observers, watching a system implode. The CAC 40 plunging 2.17% to close at 8,394 points, the German DAX tumbling 2.7%... This isn't physics; it's war branding our economies with a red-hot iron. The talking point of the day, the shadow looming over all our decisions, is that "war" which is no longer an abstract concept. It has become the symbol of a blazing Asia, a continent holding its breath as strikes intensify between Iran and a coalition led by the United States and Israel.
Central Asia: A Vacuum Cleaner for Capital
We were calmly discussing our portfolios, the best ways to hoover up returns, much like choosing a state-of-the-art vacuum cleaner to banish dust. But now, the opposite is happening. The region has become a gigantic vacuum cleaner of liquidity, but in the wrong sense of the term. 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 yawning void. Since then, it's been an uncontrolled escalation. Tehran warns its offensives will intensify, vowing that the alarm sirens in Israel will never cease. Meanwhile, the Iranian Red Crescent already reports at least 555 dead on the Iranian side.
On the ground, a macabre chess game is unfolding before our eyes. Israeli strikes are no longer limited to Gaza; they target 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. At the same time, the US confirms the loss of six of its soldiers and, in an incident as tragic as it is telling of the surrounding chaos, three of its F-15 fighter jets crashed in Kuwait, victims of "friendly" fire.
The Failure of Financial Astrology
So, what do you do when the models of financial astrology stop working? When the celestial charts we had painstakingly drawn for 2026 are torn to shreds 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 truly worries me beyond the raw figures.
Here are the three warning signals I'm watching this week:
- The Paralysis of the Gulf: Qatar had to suspend its LNG production. When the world's energy tap turns off, the entire European value chain shivers, and all our industrial sectors suffer.
- The Expanding 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, less liquid shores.
- The European Diplomatic Front: France, Germany, and Britain say they are ready to "work with the United States" to counter Iran. Translation: our budgets, already stretched thin, will have to find money for defence—money that won't be invested in our businesses, innovation, or growth.
Asia: The New, Unstable Centre of the World
Let's return to our "war" focus. In astronomy, we observe black holes by the deflection of light. In economics, we observe black holes by the deflection of capital. Currently, 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 it re-emerges transformed into a desperate flight to safe-haven assets.
Don't get me wrong. I'm not predicting the apocalypse. I'm telling you that the era of complacent, sluggish growth is over. We are entering an age where geopolitical risk analysis trumps balance sheet analysis. The bear market we are seeing isn't a technical correction; it's a re-pricing of the global risk premium. And that premium, my friends, is exploding.
So, concretely, what does this mean for your portfolio? It means we need to stop gazing at the stars (astrology) and tune into the short-wave frequencies of geopolitics. It means considering hedges we weren't accustomed to. Commodities, gold, certain currencies... But also, and this is my point, we now need to think in terms of scenarios.
Whether you're an institutional investor, a family office, or simply a high-net-worth individual, 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 devours 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 chaos, whoever has ammunition when the dust settles will be able to buy assets at fire-sale prices. Until then, hold on tight. The journey is just beginning.