The landscape of global commerce is changing dramatically amidst complex international relations. Early changes can be seen in the new trade policies of the Trump Administration which have led to a significant shift, and in numerous instances triggered tension, in the US’s diplomatic associations with its trade allies. Presently, the ongoing conflict between Iran and Israel is causing the global markets to wobble. The recent downgrading of the US’s credit ranking by Moody’s adds another facet to the prevailing discomfort amongst investors. As an investor, it is not out of place to feel somewhat alarmed when observing your financial portfolio.
Increasing geopolitical hostility can create a domino effect influencing oil prices, interest rates, patterns of trade, and the sentiment of investors. Countries akin to Jamaica, which largely rely on imports for their fuel needs and have a significant economic interdependence with the US, can expect to experience this impact in the form of elevated expenses for electricity, food, and transport. Such inflationary trends can compel the central banks, like the Bank of Jamaica, to hike interest rates if the inflationary pressures persist.
The rise in expenses can negatively influence crucial economic sectors should the US economy undergo a sudden downturn or if a subdued demand is observed for Jamaican exports. The uncertainty is only exacerbated by the unpredictable market turbulence triggered by the fiscal concerns of the US. However, amidst these uncertain times, it is crucial for investors to comprehend that smart investing is not about hurried reactions; instead it requires a well-crafted strategy implemented with discipline.
As counterintuitive as it may seem, uncertain times can often serve as an entry point for novel investment opportunities for disciplined investors. Reacting out of fear is a pitfall that investors, particularly those engaged in strategic investing, must avoid. While markets may witness fluctuations in the short term, history provides numerous examples where they have recuperated from even worse circumstances such as wars, severe pandemics and financial crises.
History offers reassurance to investors by asserting that no matter the challenges, recovery is an eventuality. Therefore, adopting an impulsive decision-making approach driven by our emotional reactions, especially the urge to sell, can often backfire. Now may be the right time to explore potential opportunities. On the Jamaican Stock Exchange (JSE), there are shares of companies with robust fundamentals that are currently undervalued compared to their pre-pandemic worth.
As evidenced on June 26, 2025, the average price-to-earnings (P/E) ratio was 23.3x, significantly lower than the 37.3x recorded in 2019. This indicates a prospect for a long-term uplift as the earnings of companies continue to gain momentum. When it comes to investing, it is not those investors who react loudest to market changes that win; it’s those who expertly mitigate the surrounding noise and remain unwavering to their initial strategy.
Potential difficulties can emerge from the adverse trading conditions, possibly affecting even the most prudent and well-managed companies if circumstances exacerbate. It is in these challenging times that skilled investing practices stand out due to their focus on the fundamentals of businesses. An intelligent strategy should enable performance over the long term without being swayed by daily market fluctuations. This approach to investing reaffirms the priority of vigorous leadership, firm business fundamentals and strategic planning to overcome short-lived fears of market instability.
A prudent course of action during these challenging times may be to evaluate your investment portfolio. Could your investment profile be too heavily concentrated on sectors that are susceptible to shocks in the global market? If so, rebalancing your investments could be a worthwhile strategy. This does not necessarily imply selling off all the current assets; instead, it encourages a readjustment of exposure.
One should consider decreasing holdings in certain potentially vulnerable sectors, put a hold on fresh investments in those sectors while introducing more resilient or counter-cyclical industries to the investment portfolio. To carry out this efficiently, efforts should be directed towards identifying the intrinsic value of companies, which is not limited to examining their historical performance. Also, if you place importance on a regular cash flow, zero in on those companies that are known for their history of reliable dividend payouts.
Having an adequate reserve of cash or near-cash resources works as a smart fall-back for unforeseen circumstances or to capitalize on new investment opportunities. Maintaining liquidity provides the flexibility that enables the utilization of investment opportunities as they present themselves, such as value stocks or other assets that are undervalued. Uncertain market periods generally offer undervalued assets at appealing prices as most investors usually take emotionally-driven decisions.
Being prepared and having the liquidity to not only spot such undervalued opportunities but also have the means to purchase them, can lead to significant advantages. It is important to remember that in a world bombarded with headlines and quick judgements, time, rather than timing becomes the most valuable asset. Attempting to time the ‘perfect’ moment often results in missing out on the best days of the market.
Instead of acting on prevailing uncertainties, root your investments in high-quality assets in sectors with strong growth potential, diversify your risk and allow your portfolio to mature over time. There will always be geopolitical conflicts and the resulting instability in financial markets, which can potentially impede your progress. Despite such roadblocks, with a well-thought investment strategy in place, your financial objectives can still be within reach, allowing you to remain steadfast on your journey despite market disruptions.