As the conflict in Iran moves into its second month, it is understandable that many investors are feeling a bit on edge. Headlines like these are hard to ignore.
If history has taught us anything, it is that markets tend to be more resilient than they feel in the moment.
Looking back can help put things into perspective. In 1990, during the first Gulf War, the U.S. economy was already weakening. Growth was slowing, inflation was still high, and confidence was shaky. Markets struggled at first, but they began to recover before the conflict even ended.
In 2003, at the start of the Iraq War, the backdrop was stronger. The economy had already started to improve, and businesses were on more solid footing. Markets responded more positively and went on to have a strong multiyear run.
Today, we see a bit of both, but importantly, we are not seeing signs that the long-term outlook has been meaningfully disrupted. While the short term can feel uncertain, the bigger picture still looks steady. From that perspective, the path may end up looking closer to 2003 than 1990.
That said, this is not a comfortable environment. There is a lot of noise and a lot of unknowns. That is part of it. What we have seen time and time again is that markets tend to move forward before everything feels settled. The way markets moved at the end of March is a reminder of how quickly things can shift.
No one knows exactly how long this will last, but the underlying strength of the economy and businesses remains in place. Periods like this can also create opportunities over time.
For now, the focus remains simple. Stay balanced. Stay diversified. Stay focused on the long-term plan.
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