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Iran Deal: Investors should expect an increase in market volatility
Investors should expect an increase in market volatility and ensure that they are properly diversified, warns the senior analyst at one of the world’s largest independent financial advisory organizations.
The warning from Tom Elliott, International Investment Strategist at deVere Group, comes as U.S. President Donald Trump announced Tuesday that the United States will exit the Iran nuclear deal and impose “powerful” sanctions.
Mr Elliott comments: “Investors should expect an increase in market volatility following Trump’s announcement that he is quitting the Iran nuclear deal.
“There will be global stock market sell-offs as the world adjusts to the news.”
He continues: “Due to the severity of the U.S. President’s approach, in the shorter term at least it is likely gold and the U.S. dollar may rally on growing fears of further conflicts in the Middle East breaking out; and risk assets, namely stocks and credit markets, may weaken. Oil may rally strongly.
“We will need to wait for the full Iranian response. However, I expect that they will try to continue to appear the reasonable partner and work with Russia and the Europeans, playing them off against the U.S. If they take a more aggressive stance, oil, gold and the dollar will go considerably higher.”
Mr Elliott concludes: “Geopolitical events such as these underscore how essential it is for investors to always ensure that they are properly diversified – this includes across asset classes, sectors and geographical regions – to mitigate potential risks to their investment returns.”
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