Peace is great for business. War is terrible for business. This is almost universally true.
“If weapons are used they need to be replaced,” says McMillan. “That makes war a growth story for these stocks, and one of the big potential growth stories recently has been North Korea,” he continued, adding, “What the agreement does, at least for a while, is take military conflict off the table.”
While peace overtures between the long-time enemies will put “defense stocks on the defensive” in the short term, investors shouldn’t worry about long-term problems for makers of military equipment, explains Gary Kaltbaum, president of Katlbaum Capital Management.
“Funding,” he says, will be “plentiful for years to come.”
It must be noted that this is not the free market at work here. War is the health of the state, and of weapons manufacturers.