Yardeni Warns 'Buy The Dip' Strategy May Not Work Amid Fog Of War Due To Iran Conflict: Report

Yardeni explained that, unlike previous selloffs driven by economic cycles, this downturn risk is rooted in geopolitics, something policymakers may struggle to counter.

Economist Ed Yardeni, president of Yardeni Research, on Monday reportedly stated that the contrarian stock buying strategy, “Buy the Dip”, may not work amid the fog of war due to the Iran conflict.

During an interview with Bloomberg, Yardeni stated that, from a contrarian perspective, a declining sentiment increases the likelihood of a good buying opportunity ahead.

“It’s worked very well for me in the past. It may not work now,” he said.

Explaining why this time may be different, Yardeni said past declines in investor sentiment were typically tied to weakening economic fundamentals, developments that often resulted in monetary or fiscal policy support.

This time, however, the uncertainty stems from the Iran war, a geopolitical shock that policymakers have little ability to counter directly.

“We’re talking about the fog of war, we’re not talking about something that US policymakers can respond to and turn around,” Yardeni added in the interview.

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