Lately, it feels like we’re staring into an abyss that makes even the most seasoned investors want to get out of the markets.

It feels like there’s a lot that’s going wrong with the world right now, and many things are quickly coming to a head.

That’s because, among many developments, the Middle East has once again become a flashpoint for geopolitical tensions.

Now, conflict in the Middle East is nothing new for the seasoned investor.

In fact, these uncertainties have largely become a typical part of the investing narrative for the past few decades.

But with that said, something FEELS different.

And now this change in sentiment comes as the US is at risk of being pulled into another regional conflict as it rightfully supports its close ally Israel following the tragic terrorist attacks in early October.

Now, on any other day, this latest military ramp-up likely would be just another typical day in the region.

But things are different now than where they were over two decades ago.

That’s because the US is already fighting a proxy war with Russia in Ukraine, while the potential for a conflict with China in the Taiwan Strait increasingly feels less like a matter of “if” and more of “when.”

And why does this matter?

Well, such an outcome could potentially leave our country exposed to three simultaneous theaters of war at a time when trust in the media, trust in our politicians, and, most importantly, trust in our neighbors and our communities is plumbing all-time lows.

In many ways, it feels like we’re staring into the abyss of calamity that’s coming at us from all directions and society appears to be coming undone at the seams.

So then, what should an investor do at such a time of instability and uncertainty?

Should you move to the sidelines and wait until things settle down before risking more of your hard-earned wealth in this market?

Well, the simple answer here is a resounding “no.”

In fact, while things feel different, they also appear eerily familiar.

That’s why one of the greatest investing minds, Benjamin Graham, likely would argue that now is the time to strap yourself in and focus on your disciplined investment strategy.

Laying the Groundwork for the Intelligent Investor

Alright, so what qualifies Graham in today’s market environment?

Well, while he’s widely known for his work in the book, “the Intelligent Investor,” his earlier work with David Dodd laid the groundwork for what would become the authority in behavioral finance, and influence the disciplined strategies used by many professional money managers during times of heightened market volatility.

You see, before writing the “Intelligent Investor” after World War 2, Graham and Dodd wrote a book called “Security Analysis,” which is a fundamental read for any budding investment professional.

In fact, this book is often widely touted by the likes of Warren Buffett and is a primary source when it comes to learning the basics of value investing.

And so, how is this book relevant almost 100 years later?

Well, consider the context in which it was written.

You see, Security Analysis was written by Graham and Dodd at a time when the investing world was coming unhinged and in a seemingly perpetual state of upheaval.

That’s because the economic landscape during this time was shaped largely by the aftermath of the stock market crash of 1929, which precipitated the worst economic downturn in modern history.

Now, many of you likely will recall that in the years leading up to the market crash, speculative excesses ruled the day on Walls Street, with numerous investors borrowing money to purchase  stocks all the while banking on the hope that the price of the day’s meme stocks would rise to the moon.

Sound familiar?

Well, as one would expect, this approach ultimately failed spectacularly and left the finances of many individuals in tatters.

And adding insult to injury, many banks were also caught up in the speculative boom and bust because many of these institutions had extended risky loans on speculative bets. And so, as these loans soured and the economy spiraled, a domino effect of bank failures ensued, leading to the Great Depression.

So then, almost simultaneously, the markets were collapsing, the banking system froze up, the economy was on the brink and social and political agitations in Europe and Asia were setting the stage for the start of the Second World War.

Any of this sound familiar at all?

A Disciplined Process

To be sure, we’re living in a time of social disharmony, political fragmentation, and low trust in news media. From a fiscal perspective, the government has borrowed so much that now its ability to meet its obligations to its own citizens is in question. And all of this is happening at a time when our country’s global influence is being challenged on all corners.

So, now that we’re once again on the brink of a global conflict that could involve any great power countries, what lessons can we take from Benjamin Graham’s writings to help stay grounded?

Margin of Safety

Well, to begin, one of the foundational principles of Graham’s investment philosophy was introduced in the concept of a margin of safety, which means investing in securities only when they are priced significantly below their estimated intrinsic value.

And, you’ll likely recall that intrinsic value is just a fancy way of saying what a security is worth when you factor in the earnings ability of the underlying firm.

Now, the difference between the intrinsic value and the purchase price represents that margin of safety and provides a buffer against unforeseen events or mispricings. In other words, what Graham is telling us to do is to focus on buying assets that cheaply valued, or are on sale.

And why is this important?

Well, it’s crucial because in uncertain times, when the future is even more unpredictable, many investors want to sell even high quality stocks. So then, when geopolitical risks and uncertainties rise, now may be the time to check out the discounts.

Mr. Market

Another lesson we can take away from Graham’s experiences is his observations of Mr. Market.

Now, Mr. Market represents the stock market’s day-to-day fluctuations and the often-irrational behavior of market participants.

You see, Mr. Market is a manic-depressive character who offers wildly varying prices for shares, swinging between undue pessimism and unwarranted optimism.

And so, the key takeaway here is to not be swayed by the daily noise and sentiment of the news or what you see going on in the broader market due to economic or geopolitical concerns.

To be sure, instead of being reactive, Graham reminds us that it’s essential to stay grounded in your own analysis, convictions, and to take the long-term perspective.

Indeed, in a world filled with noise and panic, keeping a level head and not being swayed by the crowd is essential now more than ever.

Focus on What You Can Control

Finally, in the book, “the Intelligent Investor,” Graham emphasizes the importance of focusing on what you can control.  

And so, what does this look like?

Well, it involves approaching your investing decisions from the perspective of thorough analysis and a clear understanding of what you’re investing in.

And, ultimately, this means concentrating on factors within your control, like your research, your analysis, your decisions, and your reactions.

And in broader life terms, this means focusing on your own actions, responses, and preparations made to manage your wealth rather than getting overwhelmed by global events beyond your control.

Indeed, while it’s crucial to be informed, it’s equally important to recognize where your influence begins and ends, so you can channel your energy towards areas where you can make a real lasting impact.

Takeaway Lessons

Alright, now, while Graham’s work primarily addressed investing, the core of his teachings is  about being rational, having patience, and being prepared when the world turns upside down.

Indeed, in a world teetering on the edge of various crises, these principles can guide not only your financial decisions but also your general approach to navigating uncertainty.

So then, how can you apply these principles to your life today?

Lesson 1: Margin of Safety

First, start by cultivating your own margin of safety.

You can do this by not only prudently evaluating your investment decisions but also prioritizing building a financial cushion in your personal finances.

And you can start by evaluating your current financial situation and determining how much more liquid assets you should have set aside from one month to the next to fortify your financial position against potential economic and market uncertainties.

Lesson 2: Ignore Mr. Market

The next point to consider here is to not get swayed by Mr. Market.

And how do you accomplish this end?

Well, you can start by turning off financial entertainment news and by staying consistent in your financial planning strategy, regardless of what’s going on in the world around you.

More specifically, what you’ll want to do in this situation is ask yourself if you’re making financial decisions based on research and analysis or whether the erratic emotions of the market are influencing your behavior.

This way, by not getting swayed by the daily fluctuations and sentiments, you’re ensuring that your financial decisions are grounded in a long-term perspective and research, which can protect you from knee-jerk reactions and potential big financial losses.

Lesson 3: Focus on Your Locus of Control

Finally, concentrate on what’s within your control by focusing your energy on actions and decisions that are directly within your sphere of influence.

And so, how do you do this?

Well, you can start by asking yourself what aspects of your financial life you can control and improve upon rather than stressing about global events that are beyond your grasp.

Indeed, by centering your attention on areas where you can make a tangible impact, you can enhance your financial well-being and mental peace, ensuring that you’re proactive in areas that matter most while avoiding unnecessary stress from external factors that you can’t control.

How to Invest on the Edge of the Abyss

You know, when it comes down to it, the shadow of the past looms large, reminding us of the eternal dance between calm and chaos, profit and peril.

And make no mistake, no matter how much we’ve been through over the past few years, something clearly feels different all the while feeling eerily familiar.

Indeed, while today’s market, economic and geopolitical situation may mirror the eeriness of bygone eras, we’re fortunate enough to benefit from the lessons learned from individual who have lived through similar situations.

So then, the tools and techniques that weathered storms in the past remain our lighthouse, guiding us safely through the tumultuous waves of the present.

Indeed, as we stand on the precipice of the abyss, staring into the swirling vortex of global tensions, economic upheavals, and political theatrics, it’s crucial to remember the wisdom of investing visionaries like Graham.

Remember, his professional experiences, born out of the crucible of adversity, offers invaluable insights into not just surviving but thriving as you take one step closer to becoming the master of your own financial independence journey.