The intensifying conflict in Iran has disrupted long-standing financial patterns, causing stocks and bonds to move in unison rather than offsetting one another. This shift has rendered the classic 60/40 portfolio ineffective, as traditional safety nets fail to protect against the threat of stagflation. To navigate this instability, fund managers are moving away from conventional playbooks and toward alternative assets like the US dollar, commodities, and complex credit hedges. Investors are also utilizing options and equity futures to shield themselves from sudden market downturns while central banks remain constrained by high inflation. Ultimately, the current geopolitical climate has forced a total reimagining of risk diversification strategies.
https://finance.yahoo.com/news/investors-hunt-hedges-war-shatters-230000716.html
