The best geopolitical hedges from gold to oil and even stocks

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According to Bank of America, stocks, oil and gold are good ways to hedge against geopolitical risk.

The market is being bogged down by geopolitical risk amid escalating tensions in the Middle East , and the gains we've seen likely wouldn't have been without the rise in oil and other risk assets. For those looking to hedge against geopolitical risk, stocks are actually a pretty good way to do so, along with oil and gold. Bank of America looked at the best performers in the three and six months after major geopolitical events, including the Iraq War and Russia's invasion of Ukraine .

Meanwhile, large-cap stocks have seen pretty sizable gains after these experiences over the years as well. They've brought in three- and six-month median returns of 4.6% and 4.9%, respectively. "ad geopolitical events have not been bearish for risk assets in recent years, arguably the opposite," analyst Michael Hartnett wrote in a Thursday note. "nvestors expect any negative hit to consumer and business sentiment to be quickly offset by monetary and fiscal policy.

 

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