Elsewhere, the conflict in Gaza threatens to spread into a wider clash, while Russia’s invasion of Ukraine is well into its second year.
Unfortunately, neither conflict is likely to come to an end in the near future and, due to the intrinsic link both regions have to the global oil markets, are likely to influence the performance of many of the major asset classes.
In turn, any developments in these conflicts are likely to bring fresh volatility to the markets.
Managing these challenges
When recent improvements in the performance of the financial markets are put into the context of these challenges, it is clear that investors will need to remain proactive and adaptive when it comes to managing their portfolios.
With this in mind, diversification will continue to prove to be a useful tool in the months ahead.
Indeed, if investors can create a portfolio built on uncorrelated asset classes, territories and sectors, they will be better place to mitigate the effects of volatility in certain markets and benefit from potential growth opportunities in others.
Opting for a mixture of traditional and alternative investments that perform independently of each other could also reap some rewards.
Therefore, investors could look to alternative investments like real estate, private debt and other non-traditional assets to help them navigate the economic and political uncertainty that could rock the global economy as the challenges discussed above play out.
Regardless of whether they are managing risk, aiming for stable long-term growth, or looking to benefit from the speculative growth opportunities that volatility can provide, diversification could help investors to build a more resilient portfolio.
To briefly wrap up, recent market trends are providing some positivity, but the landscape remains fraught with uncertainty, and investors need to ensure they are ready for any market shocks that could be on their way.
Roddy Hogarth is the head of distribution at RAW Capital Partners
