Merriam-Webster defines saber-rattling as overtly and often exaggeratedly threatening actions or statements, such as verbal threats or ostentatious displays of military power, that are meant to intimidate an enemy by suggesting the possible use of force.
There are many examples. Perhaps the most alarming is Russia’s threat to introduce nuclear weapons into the Ukraine conflict. But don’t forget North Korea’s frequent missile testing and Iran’s bellicose saber-rattling as the latest lurch in its erratic foreign policy.
Domestically you have US central bank comments on interest rates, credit card companies threatening to reduce mileage and other awards in the event of more restrictive regulation and a wide range of doomsday predictions relating to the adoption of AI.
Investors should respond to saber-rattling with caution. It is important to not over react to what may prove to be nothing more than a head fake. If you’re worried, it might be helpful to share your concerns with your advisor(s) as they may have access to more extensive resources that could be helpful in assessing risk. This is also a good time to review your financial objectives and plot a course that, while not fool proof, may help you to sleep better.
All comments and suggestions are welcome. Walter J. Kirchberger, CFA
