THIS is what investors should keep their eyes on

BNY Wealth head of investment strategy and equities Alicia Levine appeared on Fox Business' 'Making Money' to discuss investing amid the current geopolitical conflict. Her comments are qualitative guidance on positioning and risk management rather than new data or forecasts, and are unlikely to move markets materially (low market-impact, estimated <0.3).

Analysis

Geopolitical flare-ups typically produce a quick rotation: flows out of cyclical beta and into safety assets, plus a short-lived re-rating of news and defense-related equities. Expect headline-driven VIX spikes within the first 72 hours that compress over 2–6 weeks as liquidity providers rebuild positions; historically this pattern creates a 2–6% intra-month downside bias in broad cyclicals even when the macro picture is unchanged.

Media and information distributors are second-order beneficiaries: higher realtime consumption lifts CPMs and reduces churn for linear news outlets, but the effect is front-loaded (weeks) and fades as advertisers reallocate. The more durable beneficiary set sits further down the stack — niche defense suppliers, satellite comms, and cybersecurity firms that can convert headlines into funded orders and expedited procurement cycles; inventory and logistics chokepoints also create pricing power for specialty shippers and port handlers for 1–3 quarters.

Key catalysts to watch are (1) visible escalation (weekend-to-weekend event risk) that sustains VIX > 25 and forces equity de-risking, (2) a diplomatic ceasefire or large-scale sanctions that re-route energy flows and can normalize risk premia within 30–90 days, and (3) central bank reaction functions — a persistent risk-off that materially lowers front-end yields would favor longer duration assets, while an inflationary energy shock would do the opposite. Tail risk: sudden, broader sanctions or commodity-export disruptions can shift this from a tactical trade window into a multi-quarter structural reallocation.

Contrarian point: consensus leans heavily to gold and broad treasuries as safe havens; that trade underprices the asymmetric upside in select media and specialist defense names that monetize attention and urgent budgets faster than commodity or duration plays. Position sizing should favor short-duration, event-driven instruments (options, 1–3 month ETFS) rather than large-duration buys that assume a multi-quarter regime shift.

Key Decisions for Investors

• Long FOXA 3-month call spread (buy ATM, sell +25% OTM) to capture a front-loaded CPM/viewership bump; target +25–35% spread return in 6–12 weeks, max loss = premium. Trim if VIX drops below 16 for two consecutive sessions.
• Buy a 3–6 month defensive duration hedge: IEF or TLT (size 3–5% portfolio) to protect equity mark-to-market from a sustained risk-off; target 4–6% ETF gain if 10y yields compress >20bp, stop-loss if 10y yield rises >30bp.
• Pair trade (3 month): long RTX or LHX (5% position) vs short AAL or JETS (equally sized) to express re-rating to defense/procurement vs travel sensitivity; target +15% relative outperformance, cut if travel demand metrics (forward bookings) recover >10% vs baseline.
• Buy a near-term VIX call spread (30–60 day) as a low-cost tail hedge sized to cover 1–2% portfolio VaR; expected cost <0.5% portfolio, payoff asymmetry kicks in if realized volatility spikes above 30.
• Contrarian overweight: 6–12 month selective longs in small-cap defense suppliers and satellite comms (L3H, privately-sized exposure) funded by trimming large-cap cyclical beta — aim for 2–3x risk-adjusted upside versus broad market in a sustained geopolitical procurement cycle.