A growing war involving Iran is shaping up to be an "everybody loses" scenario for the global economy, according to analysts at Morgan Stanley, who warn that the conflict could trigger a cascade of financial shocks ranging from higher oil prices to renewed inflation and economic uncertainty.
A team of Morgan Stanley analysts argues that the war could undermine a traditional investment strategy known as the "60/40 portfolio," which balances stocks and bonds. Normally, when stocks fall, bonds rise, providing a hedge. But geopolitical shocks tied to energy prices can push both asset classes in the same negative direction.
