- A core-satellite portfolio splits investments into stable core holdings and higher-risk satellite picks.
- The core is usually 60% of the portfolio, with satellites at 40%.
- It blends passive index investing with active opportunity bets.
When the broader market sells off on geopolitical news, one sector tends to go the other way. Monday was no exception.
Lockheed Martin hit an all-time high, climbing roughly 4% to around $692 a share and now up 40% year-to-date. Northrop Grumman gained about 6%. RTX — maker of Patriot missile defense systems and Tomahawk cruise missiles — also rose more than 5% in premarket before paring some gains.
Europe joined the rally too. BAE Systems jumped around 6%, Germany's Hensoldt rose close to 5%, and Italy's Leonardo gained more than 2%. The broader Stoxx 600 fell more than 1% on the day. Defense was the clear exception.
Citi analyst Charles Armitage said the strikes are likely to "increase investor focus on missile-defense systems, as well as a likely increase in US defense spending" — which is exactly what markets priced in Monday morning.
This isn't just a one-day trade. Lockheed enters the conflict with a $194 billion order backlog. Trump has proposed boosting US military spending by roughly $500 billion. And European allies have been racing to rebuild their own defense budgets since Russia's invasion of Ukraine.
Patrick O'Donnell of Omnis Investments told CNBC the key question for markets is duration: "What's the duration of this conflict?" Trump has said it could last up to four weeks.
The longer it runs, the more munitions get used — and the more contracts get signed.
