In the Midst of the Geopolitical Uncertainty, Here's What to Do

One of my favorite sayings about the stock market – and human systems – is 'History does not repeat itself, but it often rhymes'... This quote is often attributed to Mark Twain, although there's some debate about the actual origin. It captures the fact that although no events in human history are exactly the same, […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily Weekend] In the Midst of the Geopolitical Uncertainty, Here's What to Do By Enrique Abeyta One of my favorite sayings about the stock market – and human systems – is 'History does not repeat itself, but it often rhymes'... This quote is often attributed to Mark Twain, although there's some debate about the actual origin. It captures the fact that although no events in human history are exactly the same, they are often similar because human nature doesn't really change. Here at Empire Financial Research, we take advantage of this by identifying stock opportunities created by the reactions (and overreactions) of the market's human participants. One recent geopolitical event that has roiled the stock market has come very close, though, to repeating itself exactly... We're talking about the recent threat of Russia invading the sovereign nation of Ukraine. For those of you who may not have been following the news, the global financial markets have been hit by fears that Russia, led by President Vladimir Putin, may invade Ukraine. There is a lot of history between these countries that we won't recount, but the U.S. stock market's reaction has been fierce. The S&P 500 Index saw its steepest sell-off (4% in three days) since October 2020. One particularly interesting fact about this recent turmoil, however, is that we have seen almost exactly the same scenario before – back in 2014. That year, Putin made his first incursion into Ukraine by backing an insurrection in the enclave of Crimea. Early in 2014, Russian-backed Ukrainian President Viktor Yanukovych had been removed from office by a popular movement, and Putin took advantage of the power vacuum and used the excuse of extracting him to foment an insurgency in Crimea that led to its annexation. Masked Russian troops without insignia secretly entered the territory, and in coordination with existing Crimean forces, overthrew the local government and took control. By mid-March, Crimea and its major port city of Sevastopol were declared independent and made federal subjects of Russia. The stock market didn't take this very well. The S&P 500 sold off 5.4% from January 22 to February 3 in anticipation of these events. At the same time, crude oil jumped from $92 a barrel in January to a high of $104 in March. 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Now, watch tech legend Jeff Brown reveal for the first time the exact date he believes a certain group of tech stocks will begin to soar. [Click here to watch](. --------------------------------------------------------------- What happened next? Well, once Russia had control of Crimea, there was no further movement... The region settled in an unsteady (yet still violent) equilibrium. Oil prices backed off some but stayed high through the rest of 2014 before getting cut in half in 2015. Meanwhile, the S&P 500 recovered quickly and then went to new highs by year end, up 13.4% from the bottom. Additionally, what's interesting about that movement in the S&P 500 is that this is also the average amount the S&P 500 would rally during years when the U.S. Federal Reserve began to raise interest rates. Now, all this doesn't mean this time won't be different... It absolutely could be different... And the economic backdrop in 2022 is reasonably distinct from 2014's. That said, historically, geopolitical conflicts of this nature – both in size and geography – haven't had long-lasting effects on the global economy or the stock market. We mention size and geography because there are other places where similar conflicts would be much more likely to have a greater impact on key global commodities. Iraq's invasion of Kuwait in 1990 is a good example. We would be very surprised if Russia would go that far... There is even broad historical precedent that it would not. Even if it did, though, we think the market's reaction would be much more muted. As I've said numerous times recently across my publications, the overall market is likely going through a period of volatile consolidation as we deal with decelerating growth rates, tough earnings comparables, and the start of interest rate hikes. Throwing some geopolitical chaos on top of that equation has added some volatility, but ultimately doesn't change our view that the overall economy and stock market are just fine. Take advantage of this volatility... and remember that in this environment, "trade a lot" is the way to go. In fact, when combined with a little-known strategy, this approach is even more powerful... This is the most winning trading strategy I've come across in my more than two decades in the markets. And due to the recent volatility, this could be the best possible time to put this strategy to work. That's why on Thursday, February 24, at 8 p.m. Eastern time, I'm hosting a special event to share all the details. If you're looking for a way to "juice" your returns this year, you won't want to miss it. This event is free to attend, but space is limited – [reserve your spot here](. Regards, Enrique Abeyta February 19, 2022 If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2022 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 601 Lexington Ave., 20th Floor, New York, NY 10022 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](