Is There Such a Thing as a Terror-Proof Portfolio?


In this era of increasing acts of terrorism, led by ISIS and radical Islamists, is there such a thing as a “terror-proof” portfolio?

Many investors are concerned about the affect that terrorist events and other negative geopolitical developments might have on their investment portfolios.Chicago Hit With Protests Leading Up To NATO Summit

Although I understand those concerns, history suggests thereai??i??s no reason for investors to be overly worried about potential acts of terrorism or to reposition their portfolios in an effort to protect their investments against the occurrence of any such events. Thatai??i??s because the occurrence of negative geopolitical events, including acts of terrorism, have, historically, had no lasting impact on the value or direction of securities prices.

For example, the Dow Jones Industrial Average rose by 1.5% following the assassination of President Kennedy on November 22, 1963, as compared to the day before that unforeseen event occurred. Over the ensuing three and 12 months, the Dow appreciated by 7.2% and 19.6%, respectively.

In a similar manner, the Dow Industrials rose by 7.7% and 17.3% over the three months and 12 months, respectively, following the Iranian Hostage Crisis that began on November 4, 1979.

Although the Dow Industrials, and U.S. stock prices in general, declined considerably following the September 11, 2001 terrorist attacks on the World Trade Center, several other factors weighed down stocks during the months following those attacks.

phamacy canada online taxas. arthur-andersen cartoonSpecifically, the U.S. economy was in the midst of an economic recession that began during March 2001 and numerous acts of corporate malfeasance were reported by large, publicly-traded companies, including Enron, Arthur Andersen and WorldCom.

And, even though stocks trended lower during that period, the Dow Industrials declined by only 3.8% over the 12 months following the Sept. 11, 2001 terrorist attacks.

As you can ascertain by reviewing the table below, stocks also rose much more often than they declined following numerous other negative geopolitical events over the past 76 years. Specifically, the Dow Jones Industrial Average rose 69% of the time over the 12 months following the negative geopolitical events outlined in the table below.

DavidFrazier Graphic

So, I encourage you to stop worrying about the impact that acts of terrorism might have on your investment portfolios, and instead to focus on significant economic developments when deciding how to best position your portfolio allocations.

With my research indicating that the United Statesai??i?? pace of economic growth will slow and that stock prices, in general, will trend lower over the next few months, Iai??i??m advising my firmai??i??s clients to allocate a large portion of their financial market assets to cash-like investments (i.e. money market securities) and to a few, relatively high-paying dividend securities.

For information on other safe, yet high-yielding, fixed-income securities, I encourage you to try my Free Weekly Market Commentary. Click here to subscribe to that weekly report.

Until next time,

David Frazier

David Frazier is President and Chief Market Strategist of Frazier & Mayer Research, LLC, an independent investment research firm that offers customized research and analytical services to registered investment advisors, hedge funds and high net-worth individual investors. You can check out his latest insights at:

*Editorial Contributors’ Disclaimer
The information contained within this article solely reflects the opinion and analysis about the performance of securities, investments and financial markets by the writer whose articles appear on this site. The views expressed by the writer are not necessarily the views of Weiss Educational Services, its affiliates or members of its management. While Weiss Educational Services and its affiliates accept editorial content from outside contributors, the content provided herein has not been independently verified for its accuracy. Nothing contained in this article is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Information provided on the website is for educational purposes only. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Weiss Educational Services writers, its affiliates and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Nothing on this website is intended to solicit business of any kind for a writer’s business or fund. Weiss Educational Services, its affiliates, management and staff as well as contributing writers will not respond to emails or other communications requesting personalized investment advice. periactin tablets buy, cheap lioresal.