The war between Russia and Ukraine has driven big market volatility.
Investors are uncertain about what will happen next, and they just continue to assess surging prices in commodities like oil, natural gas, and metals.
According to Ray Dalio, the founder of the world’s largest hedge fund Bridgewater Associates, war is a big factor that affects the market.
Another major factor is credit crises.
According to Investopedia, a credit crisis is a breakdown of a financial system caused by a sudden and severe disruption of the normal process of cash movement that underpins any economy.
A bank shortage of cash available for lending is just one in a series of cascading events that occur in a credit crisis.
So how to estimate the effects of wars and credit crises on the market?
In this video, Ray Dalio gives his answer. He suggests that people need to go back to history to check similar time periods. People can always learn from history.
Source: Finance Jane.
