Iran, War, Markets and Oil – Scary Times Or Opportunity?

Iran, War, Markets and Oil – Scary Times Or Opportunity?

By Raj Chokshi, CPA, MBA, CFP®

With conflict dominating the news cycle, I wanted to share some perspective that I hope you’ll find reassuring.

It’s natural to look at headlines about war and wonder what it means for your financial future. The instinct to protect what you’ve built is completely understandable. But history offers a surprisingly consistent and calming answer.

Markets Are Remarkably Resilient

Across major conflicts since World War II, the markets have dropped an average of just 6% at the initial shock – and recovered to pre-conflict levels in an average of only 28 days. One year after the start of a conflict, markets were up an average of 7%. The duration of a war, as it turns out, has historically had little bearing on long-term market performance.  The chart below shows all conflicts in the past 100 years and what market reactions were.

The reason is straightforward: stock prices are ultimately driven by corporate earnings, and most companies continue to operate, adapt, and generate profits even during periods of geopolitical stress.

When It Gets More Complicated

Not every conflict has the same market footprint. The situations that have caused the most sustained damage – the 1973 oil embargo, Iraq’s invasion of Kuwait in 1990 – shared one common thread: a major disruption to global energy supplies. When oil stops flowing, inflation rises, economies slow, and markets feel it deeply and for longer.

Today’s environment does carry some of those energy risks, particularly around key shipping routes in the Middle East. That’s worth watching. But it’s also worth noting that our economy enters this period from a position of relative strength in employment and consumer activity.

The Investor’s Greatest Risk?  Reacting to Headlines

History is equally clear on another point. Some of the best single days in stock market history have occurred during periods of fear and uncertainty. Investors who move to cash waiting for things to “settle down” almost never re-enter at the right time – and frequently miss the recovery entirely.

The goal of a well-constructed portfolio is precisely to weather moments like this without requiring you to make high-stakes decisions under emotional pressure.

What This Means for You

Your portfolio was built with diversification and your long-term goals in mind. That structure is doing its job right now. Unless your personal financial situation has changed, the evidence strongly favors staying the course and adding to your allocation with cash that you don’t need immediately.

That said, if you have questions or simply want to talk through what you’re seeing in the news, your Bluerock Team is always available.

Raj Chokshi, Partner and Wealth Manager

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