Iraqi Freedom:What does it mean to you?
Operation Iraqi Freedom is now a reality. While Americans had hoped for a quick resolution, President Bush has announced that the war will take longer than predicted. As all our prayers go out to the troops, their families and innocent Iraqi people, like most inquiring minds you probably are wondering how the war with Iraq will affect the economy and the stock market. It's a fair question to ask. One can't ignore the economic and financial effects of war. Will war dominate the markets, affecting every portfolio, retirement plan, and decision to invest or not to invest? Most economists agree that the affect the war will have on the economy depends on its duration. A short war, 30 days or less, could have a positive impact on the economy, yielding benefits because a sense of "victory" can boost people's spirits — and their spending — when it ends. During wartime, consumers are more inclined to sit on the sidelines, foregoing major expenditures until the final outcome. Financial guru Peter Lynch once said that if you spend 13 minutes per year thinking about how geopolitical events will influence your investing, you've wasted 12 minutes.