Living With Uncertainty

Venezuela is nearly 15,000 kilometres away from India.

Greenland lies almost 9,000 kilometres from our shores.

Ukraine is over 5,000 kilometres distant.

These are not neighbouring countries. They are not India’s immediate trading partners. They are not places most Indian investors think about while reviewing their portfolios.

And yet, events unfolding in these far-flung regions are shaping market behaviour in India.

Oil prices surge.

Currencies move up and down.

Risk premiums expand.

Equity markets turn volatile.

This is the uncomfortable reality of a deeply interconnected global system. Geography no longer acts as insulation. Distance does not provide safety. What happens thousands of kilometres away can ripple across markets almost instantly.

This is the butterfly effect in modern markets.

The global geopolitical landscape today is unusually volatile. Multiple conflicts are active at the same time.

United States – Venezuela
United States – Europe
Russia – Ukraine
United States – China

Together, these conflicts are increasing uncertainty across global markets. No one really knows what lies ahead. This is a classic case of unknown unknowns—events that cannot be reliably anticipated or modelled.

For financial markets, this translates into one dominant condition: uncertainty.

Risk can be measured and managed. Uncertainty cannot.

And when uncertainty prevails, markets cease to move purely on fundamentals. They oscillate on perception, headlines, and sudden shifts in sentiment.

Volatility rises.

Correlations break.

Confidence weakens.

This is how markets behave when the future becomes hard to estimate.

How Geopolitics Impacts Markets

When uncertainty dominates, markets stop behaving in neat, linear ways. Price discovery deteriorates. Signals get mixed with noise. Short-term movements increasingly reflect perception rather than underlying fundamentals.

In such phases:

Risk is repriced abruptly
Capital flows into safe havens
Sector and style leadership changes
Liquidity becomes uneven

They are characteristics of complex, adaptive markets responding to incomplete, evolving information. The common investor mistake is assuming that uncertainty is temporary and that clearer answers will arrive soon. In reality, uncertainty often persists far longer than expected. Markets do not wait for clarity.

Portfolios, therefore, must be constructed to withstand prolonged uncertainty, not positioned on the assumption that it will quickly resolve.

The Investor’s Core Mistake in Such Phases

In uncertain environments, investors instinctively try to do something.

They:

Track news continuously
React to daily market moves
Attempt to time exits and re-entries
Look for expert forecasts and tactical calls

Unfortunately, these are precisely the areas where investors have the least control and the lowest probability of success. Clarity comes from accepting this limitation.

What You Can’t Control

There are large parts of the system that are entirely outside an investor’s influence:

How geopolitical conflicts evolve or escalate
Government decisions, sanctions, or policy responses
Market reactions to breaking headlines
Short-term price movements and volatility
Media narratives and expert opinions

Trying to act on these variables usually increases anxiety and leads to reactive decisions.

Markets punish the illusion of control.

What You Can Control

While the external environment is uncertain, portfolio structure and investor behaviour are not.

You can control:

Asset allocation aligned to your true risk capacity
Adequate emergency and liquidity buffers outside equity markets
Avoiding leverage and short-term dependence on market returns
Investing only with capital meant for long-term goals
Your behaviour during drawdowns and uncertain phases

This is where long-term outcomes are actually determined.

Uncertainty Is Inevitable

Uncertainty is not an exception to the system; it is the system itself.

What changes is only the degree to which it becomes visible.

In calm periods, uncertainty hides behind stable prices and reassuring narratives. During geopolitical stress, it surfaces abruptly, reminding investors that markets are probabilistic, not predictable. Waiting for clarity before committing capital often means waiting indefinitely.

How Bad Can It Get?

Markets can fall sharply.

They can remain volatile for extended periods.

They can deliver muted returns for years.

This is not pessimism. It is a historical reality.

What determines long-term success is not avoiding difficult phases, but being prepared to live through them without panic.

The Bottom Line

Geopolitical uncertainty is unavoidable. Market volatility is inevitable. The role of the investor is not to predict how events will unfold, but to remain aligned with intent, process, and time despite not knowing. What separates outcomes is not events, but overreaction, weak structure, and emotional decision-making.

Markets will eventually find their balance, as they always have.

Investors who succeed over long periods are not those who predict events correctly. They are those who accept uncertainty, build resilience into their portfolios, and remain disciplined.

Control what you can.

Accept what you cannot.

Allow time to do the rest.