MONEY THOUGHTS: Don't predict, instead ponder and plan
AS YOU read this Money Thoughts column, you will probably remember July 2026 as an volatile month for markets.
In July 2026, the financial markets experienced volatility for three primary reasons. First, the Iran conflict escalated once again, leading to increased oil and gas prices due to the closure of the Strait of Hormuz and subsequent attacks on Gulf neighbours. Second, artificial intelligence (AI) stock trades witnessed significant sell-offs, prompting investors to question the profitability of massive AI investments by hyperscalers like Amazon, Microsoft, and Alphabet.
Lastly, inflation resurfaced, driven by punitive tariffs imposed by the US and the ongoing war with Iran. These factors cast a shadow on investment and business, necessitating a shift from predictions to prudent planning.
The key takeaways from this volatile period are threefold. Firstly, despite the unpredictable nature of wars and rumours of wars, investors should avoid risky assets in favor of hybrid savings and investment portfolios that can withstand both peaceful and turbulent times. Secondly, while the AI revolution holds promise for productivity and economic growth, it also poses risks to employment and consumer demand.
Investors should focus on companies with genuine profits and free cash flow, rather than being swayed by misleading corporate narratives. Lastly, inflation, exacerbated by US tariffs and the Iranian conflict, necessitates a well-diversified SIP across various asset classes, geographic regions, and time horizons. By adhering to these principles, investors can increase their likelihood of steadily growing wealth over the long term.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
