War is spoken about in our news, media, and history books. It could be Nazi Germany and fascist Italy against the United States and the former Soviet Union during World War II. Nowadays, there’s a lot of talk about World War III possibly starting with tensions between Israel and Iran rising or tensions between the U.S. and Russia.
According to Fox News, “The U.S. is ‘sleepwalking’ into a global war against its top adversaries united under an axis of ‘malign partnerships’ and experts are sounding the alarm that neither the U.S. military nor the public are prepared for World War III.”
There is something very powerful, which is “money.” Capitalism, finance, stocks, and banks are all very intertwined with money. Let’s not forget Wall Street, America’s capital for finance. Now, what do money and stocks have anything to do with war? Well, war is something that can be profited from.
It’s assumed that only world leaders profit off of war but this is far from the truth. People who also have the opportunity to make a buck are investors in the stock market. To be clear, not all investors profit off of war, but it’s possible to do so and many do.
There are different types of stocks to invest in which can be profited from. Famously, the “S&P 500” which is a stock popular among investors, including multi-billionaire Warren Buffet. Individuals can even invest in food chains or clothing lines such as Starbucks and Lululemon. When selecting investments, stocks can be added to an individual’s stock portfolio.
One can leave money in one of these stocks and either lose or gain money depending on the condition of the market. Another way to profit off the stock market is through trading. Trading stocks is to buy and sell stocks which can be a loss or gain depending on the worth of the stock you buy or sell.
War plays into this as the stock market has “defense stocks.” Defense stocks are industries and companies that produce arms and weapons and their stocks go up during periods of war. Examples of this are “RTX Corporation” and “Lockheed Martin.”
A very recent example of defense stocks going up during war, is with Israel killing a leader of Hezbollah which caused Iran to launch a missile strike on Israel. This caused the market of defense stocks to rise and even surpass the S&P 500.
According to the Wall Street Journal, “In the days following the Israeli airstrike that killed the leader of Hezbollah on Sept. 27, driving Iran to launch a ballastic-missile attack on Israel, shares in major military contractors such as Lockheed Martin and Northrop Grumman vastly outperformed the S&P 500.”
In relation to investing into defense stocks, Business teacher Donald Desalvo stated, “In theory, yes investing in defense companies could increase war. If no one invested in those companies, they would not do as well financially. But, the majority of their funding is not stock investors, it’s governments buying their products. As long as governments have militaries, they will continue to do business with them.”
Business and Marketing teacher Micheael Di Iacova went on to state, “The difference between investing in defense stocks and being a war profiteer is the line between what is moral and what is immoral. Having a strong defense system in place as a deterrent for war is moral; intentionally manipulating conditions and creating/spreading misinformation in order to stoke and prolong war is immoral.”
War certainly affects the average person, especially the people living in countries at war with each other. Citizens may experience chaos in their cities with destruction of buildings and houses. Even those in other countries that aren’t at war may experience fear of war coming to their country. How does the stock market affect the average person?
Global Politics teacher Matthew Francolino said, “Fluctuations in the stock market definitely affects the average person – especially because so many people have retirement accounts and other investments in the stock market. And even for people who don’t invest in the stock market, it has a great effect on our overall economy when it comes to jobs, wages, prices, etc.”
Defense stocks certainly aren’t a modern innovation. The Cold War was a period where tensions between the United States and the former Soviet Union were rising. Defense stocks became an allure for investors as the market for weapons and arms was at a high.
Countries fight amongst each other and weapons and arms are involved. Some investors take advantage of this situation by investing in these companies who produce weapons. According to Forbes, “Defense stocks typically gain during times of heightened conflict as the companies’ revenues rely heavily on U.S. government contracts.”
As expressed, money is very powerful. Whether it’d be from a nine to five job or investing in defense stocks, people find different ways to make money.
