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View all search resultsThe biggest investment risk right now? Risk aversion
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A trader works on April 24, 2026, on the floor of the New York Stock Exchange (NYSE) in New York City, the United States, before the closing bell. (AFP/Charly Triablleau)
I
n a swirling world of heightened uncertainty, investors could be forgiven for hunkering down and minimizing exposure to proliferating risks. Yet paradoxically, the biggest risk may be risk aversion itself.
With the Iran war set to enter its third month, the largest global energy shock in decades is stifling growth, stoking inflation, and confounding policymakers. And that's on top of the new world order, marked by de-globalization, de-dollarization and trade wars, that investors were trying to make sense of before the war started on Feb. 28.
All good reasons to reduce exposure to risk assets like equities and adopt a more defensive posture, right? Not really.
As it turns out, money talks. Specifically, profit. United States companies, particularly the tech megacaps (companies with a market capitalization above US$200 billion) continue to generate bumper earnings, largely driven by the artificial intelligence boom. The possible holes in this narrative, like the potentially unsustainable capex binge and the heavy sector concentration, are well-known. But the fear of missing out, or FOMO, continues to outweigh everything.
Investors are being rewarded for holding the line. Since the war started, traditional safe havens like gold, US Treasuries, and the Swiss franc have all depreciated, while the Nasdaq and S&P 500 have climbed to new highs. The Nasdaq is up 9 percent since Feb. 28.
Investors who sought cover found underperformance instead.
Other markets around the world have powered ahead too, Japan's Nikkei 225 and South Korea's KOSPI both hit new peaks this week, but none carry the "risk on" torch quite like Wall Street.
