Investor Behavior on Israeli-Palestinian War and Current Money Market Uncertainty

Abstract

In the fierce geopolitical constellation among the world's great powers, given the increasingly complex conflict between Israelis and Palestinians, the worst could happen. The conflict could spread to some regions in the Middle East, such as Syria, Iran, or the Strait of Hormuz, which is an important route that accounts for 30% of the world's total oil trade. There are investors who believe that investment should be centered on consideration of financial condition. Investors and consumers withdrawing their funds from companies involved in conflicts can affect the financial performance of those companies. When investors make investment decisions, they consider both quantitative and qualitative aspects of a financial product or service. Grey swan event is a term used to describe events that are very unexpected but plausible. There are also some investors who take advantage of the momentum of Boycott, Divestment, and Sanctions (BDS), stock investments in companies that are suspected to be external to Israel to be able to extract potential stock investments. The first "black swan event" can bring down the market or, conversely, cause an explosive growth of a particular asset, and no one can prepare for it. Safe haven is a safe investment asset when world economic conditions are shaken due to a crisis or geopolitical issue, such as war or humanitarian crisis.