The Business of Defense: Why Financial Investment is a Necessity


National security and defense are important. In fact, they’re more than important, they’re integral to modern life. Every country needs an active, well-trained, well-funded military. From land to sea, a strong frontline against potentially unwanted visitors is crucial. Training soldiers is a major part of building an effective defense system. However, boots on the ground, particularly in today’s world, is only half the battle. Technology, infrastructure, and supplies all have to be covered. With that being true, one cannot escape the necessity and influence of money in the defense sector.

There is Money in Security and Defense

Indeed, you only have to look at the amount of money African countries spend on defense to see that it’s a major part of the military process. Of all the largest nations in Africa, Algeria spends the most on defense. Its $13.9 billion annual costs are almost $4 billion more than Egypt ($10 billion). Where there is money, there are innovation and investment opportunities. The weapons and provisions used by Africa’s armed forces have to be made and supplied by someone. For those with an eye for business, this is an opportunity.

Image: Pixabay

From the fighter jet technology produced by Lockheed Martin and Boeing, to the ships of General Dynamics and IT systems of Leidos Holdings, many companies are invested in defense. In turn, those wanting to trade stocks and shares can invest in defense. The advent of online trading has made it possible for almost anyone to buy and sell CFD stock shares in defense companies. In fact, what’s interesting about CFD equities is that traders can go long or short. As CFDs don’t require you to purchase the underlying asset (i.e. stock), you can speculate on the price increasing (going long) or decreasing (going short), which is useful in the defense sector because it’s never static.

Defense Demands Ebb and Flow

Armies and navies aren’t constantly fighting. Yes, national security is a 24/7 operation. However, there will be times of increased activity and times of relative peace. The value of defense equities will ebb and flow with these changes. Indeed, just like any other business market, defense stocks fluctuate on the basis of supply and demand. Naturally, from a humanist perspective, there’s a desire to keep demand at a level that avoids dire consequences. However, it’s an unavoidable fact of life that conflicts occur.

Image: Pixabay

Moreover, it’s a fact that defense is integral to the well-being of every African country. That means investments are necessary. People may not like to think about war being a business but, in some ways, it is. Being able to trade shares in defense companies like Lockheed Martin is proof of that. More significantly, we see African countries spending large portions of their GDP on defense. National security is a business, and, for many, it pays to be in the defense business. When it comes to it, security spending is an investment worth making, because you’re investing in the preservation of safety and, ultimately, life.