Global Stock Plunge Triggered by US-EU Tension: Why "Wait and See" is the Best Move for Individual Investors Now

Introduction: A Sea of Red in the Markets

Today, we woke up to a sea of red across global markets. The escalating economic friction between the United States and Europe over resource development rights in Greenland has finally triggered a widespread sell-off. For many of us, watching our portfolios shrink in real-time is nerve-wracking. However, as a salaryman individual investor, my immediate reaction isn't to panic sell or to rush in and "buy the dip." Instead, I am choosing to do absolutely nothing. In this post, I will explain why staying on the sidelines is a legitimate strategy right now.

The Double Whammy: Geopolitics and Domestic Uncertainty

The current market drop is not just a typical technical correction; it is driven by fundamental geopolitical shifts. The tension over Greenland involves critical supply chains for rare earth elements essential for semiconductors and EVs. When two economic giants like the US and the EU clash, the ripple effects are unpredictable. Adding to this complexity for Japanese investors is the domestic political situation. With the upcoming general election in Japan, political uncertainty is at its peak.

Foreign investors tend to dislike uncertainty more than anything else. With the "double whammy" of global trade friction and potential shifts in Japanese leadership, the risk premium for holding stocks has skyrocketed. Attempting to predict the market bottom in such a volatile environment is akin to gambling, not investing.

Why I Am Waiting Until the Q1 Earnings Season

My strategy is simple: preserve capital. I believe the prudent move is to wait until the end of the first quarter earnings season before making any significant moves. Why wait that long? Because we need to see how this geopolitical friction actually impacts corporate guidance. Stock prices move on future expectations, and right now, companies themselves likely do not know the full extent of the damage to their supply chains and costs.

Until we see concrete numbers and revised forecasts around April or May, buying stocks now is essentially flying blind. As a salaryman investor with limited funds, I cannot afford to take unnecessary risks. The goal is to survive in the market for the long term, and sometimes, the best trade is no trade at all.

Conclusion: Patience is a Virtue

The headlines regarding Greenland and the US-EU standoff are alarming, and the red numbers in our accounts are painful. However, this is the time to exercise patience. Instead of staring at the charts, I plan to use this time to research potential high-quality companies that are being unfairly sold off, preparing my watch list for when the dust settles. Let's keep calm, hold onto our cash, and wait for the fog to clear after the Japanese elections and the upcoming earnings reports.