Earlier this week, I’d discussed rising tensions between Russia and Ukraine. At the time, it looked like Russia and NATO were on the cusp of making some progress in diplomatic talks. Unfortunately, the situation has deteriorated over the last few days. Namely, the NATO alliance moved to reject Russian demands that NATO avoid trying to bring Ukraine into its sphere of influence.
The relative decline of the United States as a global superpower is giving rise to the kind of multipolar world that existed before World War II. Unfortunately, that may mean a return to great power conflict. Investors should prepare for this reality.
Investors may want to target the SPDR S&P Aerospace & Defense ETF (NASDAQ:XAR). This ETF seeks to provide returns that track the performance of the S&P Aerospace & Defense Select Industry Index. Shares of this ETF have plunged 9.5% in 2022 as of late afternoon trading on January 28. This has pushed the fund into negative territory in the year-over-year period.
Some of the top holdings in this fund include top defense contractors like Lockheed Martin and Raytheon Technologies. Moreover, there are familiar names like Mercury Systems, General Dynamics, and Howmet Aerospace. Shares of this ETF last possessed an RSI of 26. That puts this fund in technically oversold territory at the time of this writing. Now is a perfect time to buy the dip.