Markets may be underestimating Israel-Iran risk, says Richard Harris

Richard Harris, Executive Director at Port Shelter Investment Management, believes investors may not be fully factoring in the seriousness of the Israel-Iran tensions.“Markets are behaving as if this is just going to be a small skirmish and then finish,” Harris told CNBC-TV18. “Now we do know that any skirmish between Israel and Iran is not a small skirmish. It’s really quite serious.”
Harris pointed out that traditionally, during heightened geopolitical risk, assets like the dollar and US Treasuries tend to attract strong demand. But that hasn’t happened yet. This reflects misplaced investor complacency.
In response to the broader global uncertainty—including tariffs, elevated inflation, and geopolitical instability—Harris has positioned his portfolio more defensively. He’s reduced exposure to US equities, increased allocations to underperforming markets like China and Europe, and raised cash levels. “I put on a hard hat and sit on my hands,” he said, describing his current investment approach.Also Read | ANZ economist views oil price jump as a market reset, not a shock

He believes the only reason the US would get involved in the Israel-Iran conflict is if the Strait of Hormuz, which handles up to 25% of global oil shipments daily, were to be blocked.

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India, however, remains a bright spot in his outlook. While he expects Indian equities to largely move in line with global markets in the near term, he continues to maintain exposure to the country. “Let’s face it, over the last five years, it’s been a fantastic investment,” Harris said.

Although equity markets are known to treat geopolitical crises as buying opportunities, Harris is waiting for a meaningful correction before considering a shift in strategy.

For the full interview, watch the accompanying video

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