Fathers. Mothers.

Sons. Daughters.

Brothers. Sisters.

This is the tragedy of war. It never changes.

If you’ve lived long enough on this Earth, then you already know that war is an inescapable part of the human experience.

People fight and die for five main reasons:

• Land.

• Resources.

• Religion.

• Ideology.

• Revenge.

Source: France 24

The current situation in the Middle East is a volatile mix of all these factors. Here’s why it matters:

• In 1948, Israel was founded as a homeland for the Jewish diaspora. This was an issue of urgency. The horrors of the Holocaust had left two-thirds of Jews on the European continent dead. The survivors knew one thing: they couldn’t possibly endure another genocide. So a safe haven needed to be secured.

• However, Israel was a tiny fledgling state. It had no significant natural resources. Its chances of success initially looked bleak. Nonetheless, the nation’s ability to adapt, improvise, and overcome has been extraordinary.

• British hairstylist Vidal Sassoon, who served in Israel’s underground army during the independence movement, spoke about his patriotism: ‘When you think of 2,000 years of being put down and suddenly you are a nation rising, it was a wonderful feeling.’

• Since 1948, Israel has fought and won eight major wars against its regional neighbours. These external conflicts have been largely resolved through peace agreements with Egypt (in 1979) and Jordan (in 1994).

However, it’s the internal conflict raging within Israel itself that’s the most heart-wrenching and protracted:

• David Ben-Gurion, Israel’s first prime minister, talked about this moral dilemma: ‘Why should the Arabs make peace? If I was an Arab leader, I would never make terms with Israel. That is natural: we have taken their country. Sure, God promised it to us, but what does that matter to them? Our God is not theirs. We come from Israel, it’s true, but 2,000 years ago, and what is that to them? There has been anti-Semitism, the Nazis, Hitler, Auschwitz, but was that their fault? They only see one thing: we have come here and stolen their country. Why should they accept that?’

• Indeed, this is the genesis of the Palestinian problem. Over the last 75 years, they have been left displaced by the geopolitical trauma. They have come to represent an existential crisis that has never been resolved.

• This is particularly true of the Gaza Strip — an enclave of 2 million people squeezed into 365 square kilometres. This makes Gaza one of the most densely populated places on the planet. To put this into perspective, our very own Lake Taupo in New Zealand is 616 square kilometres.

• Currently, Gaza is being run by Hamas. This is a radical Islamist group that rejects Israel’s right to exist. Hamas aims to destroy the nation and harm Jews. In doing so, it actively feeds off generations of grievance.

Now, regardless of your political views, we can agree on one fact — Hamas is a breeding ground for terrorism:

• Since 2007, Gaza has been a flashpoint, sparking off five wars. This latest round of bloodshed is by far the worst one yet. The reported death toll is well over 2,000 so far, with many more wounded.

• To complicate matters, over 100 Israelis and foreign citizens have been abducted by Hamas militants. They have been brought into Gaza, to be used as human shields and bargaining chips. This is a ruthless strategy.

• Israeli prime minister Benjamin Netanyahu has vowed to hit back against Hamas. ‘We will take strong revenge for the black day they gave the people of Israel. We will operate everywhere and with all of our force.’

• Right now, Israeli airstrikes are pummelling Gaza. A large ground offensive may soon follow. Urban fighting within the tight confines of Gaza — street by street, building by building — seems all but certain.

Source: Axios

So, ultimately, where is all this going?

• If you’re searching for a clue, you might find it in the Oscar-nominated documentary The Gatekeepers. This is a raw look at the Shin Bet, the Israeli internal security service, as they carry out counterterrorism operations within Gaza.

• The documentary sums up the Palestinian motivation for violence: ‘Victory is to see you suffer.’

• What’s profoundly tragic is this: genetic research has shown that Jews and Palestinians are closely related. They are both descendants of the Canaanite bloodline of the Bible. This means that Jews and Palestinians are not just neighbours at war, but cousins at war. The aspirations and heartaches of these two people are eternally linked in a shared destiny.

What will the long-term impact on the stock market be?

Source: The Denver Post

There’s no doubt about it. War is grim. War is hideous. War is abhorrent:

• Civilians in Israel have been mutilated and murdered. Lives have been destroyed. The images of brutality that we’ve seen in the media lately are deeply affecting. This is especially true for those of us who live in peaceful countries like Australia and New Zealand.

• However, it’s important to understand that fighting is a way of life in the Middle East. After all, this is the ancient birthplace of fanatics, terrorists, and assassins. The legacy of revenge is hardwired into the region’s DNA. All this has happened before. All this will happen again.

• As a result, the market seems to be taking the situation in its stride. On the first day of trading this week, American stocks were in the green, shrugging off any concerns.

• Oil prices briefly spiked 4% in the wake of the latest violence. However, they soon plateaued and levelled off. Any impact on the global oil supply has been negligible. According to the US Energy Information Agency, Israel has ‘virtually no crude oil and condensate production’.

• Meanwhile, analyst Tom Lee of Fundstrat believes that the trouble in Israel may actually be beneficial for the market in the longer term. Treasury yields are retreating, signalling a decline in interest rates. In other words, bad news is good news for stocks.

Source: Bloomberg

Is a wider conflict in the Middle East possible? Yes, of course. But even so, history tells us that geopolitical news doesn’t sway the market for very long:

• The market is neither liberal nor conservative. It is agnostic.

• The market is neither moral nor immoral. It is amoral.

• Here is the truth: the market is a force of nature. A highly evolved animal with a primal instinct of its own. It will digest all available information — then immediately price ahead and move forward. This may happen quicker than most people think.

Source: David Jeremiah Blog

So, ultimately, here’s what investors should be mindful of:

• Continue to pray for Israel. Continue to pray for peace and healing. Fathers. Mothers. Sons. Daughters. Brothers. Sisters. They need all the goodwill they can get during a time of war.

• Meanwhile, when it comes to the stock market, emotions are best kept in check. The temptation to click ‘SELL’ during a crisis may be strong. But fund manager Peter Lynch believes it’s the wrong move. He says: ‘Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.’

• It’s important to note that all storms — even the most turbulent ones — eventually pass, giving way to brighter days ahead. The trick is to look beyond the fear.

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(This article is general in nature and should not be construed as any financial or investment advice. To obtain guidance for your specific situation, please seek independent financial advice.)

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