Recent military escalations in the Middle East — involving U.S. and Israeli airstrikes and Iran’s retaliatory attacks — have understandably drawn global attention. Events like these often spark short-term market volatility, particularly in oil and other commodities, but history shows they have rarely derailed long-term market growth.
What history tells us:
- Geopolitical crises tend to have significant political and human effects but limited lasting impact on global markets.
- Corporate earnings, not conflicts, drive stock performance over time. Even during the ongoing Russia–Ukraine war, the S&P 500 has risen more than 60%.
- Defense and energy sectors often adapt, with some markets seeing indirect benefits from increased government spending.
How bonds may react:
Wars can add to fiscal pressures as governments borrow more, affecting bond yields and prices. If energy costs rise, inflation expectations can also push yields higher. These are normal market adjustments, not signs of long-term distress.
Investor takeaways:
- Resist the urge to “do something” during unsettling news cycles. Emotional decisions—like moving to cash in search of safety—can lead to missing some of the best market recovery days.
- Staying invested through volatility has historically paid off for disciplined investors.
How to stay grounded:
The best defense is a solid, diversified portfolio tailored to your goals—combining U.S. and international equities, bonds of varying maturities, and possibly real assets like precious metals. A balanced strategy helps manage risk and maintain confidence even in uncertain times.
Please reach out if have any questions about your portfolio or would like to review your long-term financial plan.
Have a great weekend,
Tracey & Paige
Source: https://www.fidelity.com/learning-center/trading-investing/geopolitics-war-and-markets
Note: All mortgage related transactions are provided by Centum One Financial Group. Any information in the enclosed note is provided by Tracey Marshall who is a registered mortgage agent under the Financial Services Commission of Ontario. Centum One Financial Group is not affiliated or related to Security Financial