As we witness the current market volatility, it is natural to feel a sense of concern, not just for your portfolio, but for the global state of affairs. Our role is to manage your financial security. As your financial stewards, we must focus on the reality of market mechanics.

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History teaches us that military conflict — specifically in the Middle East — has paradoxically been a catalyst for market resilience and growth. History shows that the uncertainty leading up to and at the beginning of the war, is often worse for stocks than the war itself.

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Once the path clears, markets tend to stabilize and march even higher and price-in war before it happens. Once a conflict begins, the fading of uncertainty often allows investors to focus back on corporate earnings and economic fundamentals.

Consider the historical performance of the S&P 500 following these major Middle Eastern conflicts:

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The Gulf War (1990-1991): After an initial shock and a brief recession, the S&P 500 rose over 25% in the year following the start of hostilities.

The Iraq War (2003): Despite widespread domestic and international opposition, the market bottomed just days before the invasion. One year later, the market was up approximately 30%.

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The 2014 Intervention against ISIS: Markets remained remarkably steady, continuing a long-term bull run despite renewed regional instability.

Historically, war often leads to increased spending and industrial mobilization, which can bolster corporate earnings in the defense, technology, and energy sectors. While we do not celebrate the circumstances that lead to these gains, we must recognize that the stock market has a long track record of thriving during and after wartime.

Current market movements, such as the rise in defense and energy sectors, are
typical reactions to this type of event. Our strategy remains focused on high-quality assets that can weather these temporary storms.

Our strategy is to remain disciplined. Selling into a panic has historically been the greatest threat to long-term wealth — far greater than any war. We are monitoring the energy markets and all other sector allocations closely to ensure your portfolio is positioned to weather this storm.

The good news is that even in times of volatility, maintaining a diversified, long-term investment strategy can help position you for financial success.