Sounding like an ancient philosopher, Donald G.M. Coxe advises, "Achieve peaceful nights by investing in leading war stocks."
Investors shouldn't let war and threats of terror, nor the fractured U.S. alliance with France, freeze their investment positions, contends Mr. Coxe, chairman and chief strategist, Harris Investment Management Inc., Chicago.
"If the prevailing ethos (fixated on these foreign policy crises) has it that the most obvious investment tactic is to do nothing, then the ensuing pathos on Wall Street suggests it is probably time for wise investors to start placing their bets on the world after these crises have passed," he wrote in Basic Points, an investment strategy report he produces for clients.
"Fear and despair are not permanent conditions: They create buying opportunities ... Capitalism is unsentimental," he counsels.
The U.S. economy and financial markets "will continue to bear a disproportionate share of the cost" of the war on terror, meaning the currency of countries participating in the war isn't as good a bet as the currency of those that are. And Mr. Coxe forecasts a continued decline for the U.S. dollar, adding that "China will be the biggest winner from that devaluation - whose exports to the industrial world are rising more than 30% a year."
He recommends euro-denominated bonds and defense stocks.
"This is not going to be a world with a low-risk component, even with Iraq settled," he advised in a teleconference.