Calm reaction – stick to the plan

The unrest in the Middle East has naturally generated headlines and short-term uncertainty in the markets. So far, however, the reaction has been relatively moderate. Historically, regional conflicts have rarely had a lasting effect on global stock markets, and investors are not yet pricing in a worst-case scenario.

We are seeing the typical movements in such periods: energy prices rising and increased uncertainty in certain cyclical parts of the market. For long-term savers, this is primarily a reminder of why a well-diversified portfolio is important.

Diversification is about more than sectors

At NOON, we do little in the way of active sector selection. Instead, we work with geographical diversification and a good balance between different markets.

When individual regions or markets experience large movements, it may be prudent to:

• Rebalance back to the desired allocation

• Gradually invest new savings capital

• Stick to a long-term plan

This is not about "timing" the market, but about ensuring that the portfolio does not drift too far from your strategy.

Our long-term allocation

Over time, US stocks—especially large technology companies—have provided very high returns. This also means that the USA currently makes up a large part of global indices.

We therefore have an underweight in the USA, and a correspondingly slightly higher exposure to:

• Europe

• Emerging markets

• Companies with lower valuations and higher dividends

This provides broader geographical diversification and reduces dependence on a single market.

What does this mean for you as a saver?

For most people, the most important thing now is to:

• Continue saving as planned

• Avoid making big decisions based on short-term unrest

• Ensure that the portfolio is correctly structured for your time horizon

History shows that markets often recover quickly when uncertainty subsides.

Conclusion

Although the news landscape can be volatile, the main picture remains unchanged: A long-term, globally diversified portfolio is the best way to build wealth over time. We are closely monitoring developments and adjusting the geographical balance.

Regards,

Even Krohn-Pettersen

CIO