We will be entering a war economy. We are at the end of the monetary cycle and the politicians and those in power believe they need war in order to remain in power as they can use war as an excuse for monetary problems that they have caused.
I asked Brave's AI what assets do well under a war economy and it spit out the following:
Under a war economy, certain assets tend to perform well due to the increased demand for defense-related goods and services, as well as the government’s focus on national security and infrastructure development. Some of these assets include:
Defense contractors:
Companies that produce military equipment, weapons, and services tend to thrive during times of war or heightened military activity. These companies may include those involved in the production of aircraft, ships, tanks, and other military hardware, as well as those providing services such as logistics, maintenance, and training.
Technology and innovation:
The rapid development of new technologies is often driven by the need for military superiority, leading to investments in research and development, particularly in areas such as artificial intelligence, cybersecurity, and advanced materials.
Infrastructure development:
War economies often prioritize infrastructure development, including the construction of roads, bridges, and other critical infrastructure, which can lead to growth opportunities for companies involved in construction, engineering, and related services.
Energy and resources:
Wars often require significant energy resources, leading to increased demand for fossil fuels, alternative energy sources, and related infrastructure. Companies involved in the extraction, production, and transportation of energy resources may benefit from increased demand.
Healthcare and medical services:
Wars often result in increased demand for medical services, including emergency care, rehabilitation, and treatment of injuries and illnesses. Healthcare providers, medical equipment manufacturers, and pharmaceutical companies may experience growth during times of war.
Government bonds:
Government bonds, particularly those issued to finance war efforts, can be a safe-haven asset during times of conflict, as investors seek stable and secure investments. Precious metals: Precious metals such as gold and silver often serve as a store of value during times of economic uncertainty, including during wars, and can provide a hedge against inflation and currency fluctuations.
Cybersecurity:
As wars increasingly involve cyber warfare, companies and governments invest in cybersecurity measures to protect against cyber threats, creating opportunities for cybersecurity companies and professionals.
It is essential to note that these assets may not always perform well during times of war, and their performance can be influenced by various factors, including the specific nature of the conflict, the effectiveness of military strategies, and the overall economic conditions.
The only one I do not agree with is government bonds. The is no plan to pay these back and countries that find themselves at odds with the U.S. are selling long term treasuries.
Under energy and resources, I believe it should have elaborated more on the inclusion of base metals and soft commodities as war is highly inflationary.
I have started a portfolio in my stop loss tracker google sheet. I will be making access to it shortly. It is going to get really tough. The WW3 portfolio should help.
