Throughout history, geopolitical events have had a deep impact on our lives. But what is their impact on the financial markets? The answer might surprise you.
1989: Fall of the Berlin Wall
The fall of the Berlin Wall on November 9 1989 marked the effective end of the Cold War, that had dominated the post-war political landscape.
From 1940 to 1943 the Dow steadily declined, hitting its lowest point around July of 1942. But by the end of the war, the Dow bounced back above its pre-war level.
What's the conclusion?
While geopolitical events can have a deep impact on our individual lives, the impact on global financial markets tends to be smaller, and more short-lived.
Investors should diversify globally and stay invested through periods of turbulence.