U.S. markets have proven their resiliency over the course of the year as the major indices have been able to shake off numerous headline events that in previous markets would have derailed an upward trajectory.
The explosion of war between Israel and Hamas over the weekend has garnered the world's attention, but markets seem to have shaken off any uncertainty from the conflict with stocks posting big gains this week.
Much like the ongoing war, people looking at the same information regarding market behavior can come to vastly different conclusions as to whether triple digit gains for the S&P 500 in the midst of a hot war featuring one of the U.S. closest allies is a good thing or not.
For perma-bulls, the market's reaction shows just how much confidence investors have in the strength of that market. For others like billionaire investor Paul Tudor Jones, the markets' resilience is a reason for concern.
"I think Israel... it's a huge tragedy, but I think you have to put it in a larger geopolitical context," Tudor Jones, founder and CIO of Tudor Investment, told CNBC Tuesday. "We now have possibly three theaters where we will have geopolitical challenges. We have the Middle East and Israel, obviously the Ukraine and Russia, and at some point down the road Taiwan and China."
"I would say... certainly since i was born... this might be the most threatening and challenging geopolitical environment that I've ever seen. You have four nuclear powers, three of whom are led by sociopaths, which are China, Russia and North Korea."
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This assertion begs the question for investors: what can you do about it?
Bennett Raglin/WireImage/TheStreet
Different type of investor in this market
Historically, investors have treated so-called "headline events" that upend the world's status quo as an opportunity to hedge some of their bets or even take some money off the table. But Tudor Jones is seeing a different type of investor for this market.
"I think we've become inured to headline risk. If you think about the market's reaction to what happened over the weekend it was a linear response. It was risk off, but it wasn't anything that possibly recognizes just how dangerous this can be. And I think it's because we've become exhausted with headline risk," Tudor Jones said.
Meanwhile the crew over at Street Smarts polled some of TheStreet's financial experts to find out how investors should keep their cool and trade the market in spite of the global insecurity weighing.
Check out what they had to say about investing in oil, investing in the stock market, and investing in defense stocks.
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