Historical Insights on Market Resilience During Geopolitical Conflicts

Posted June 20, 2025

In light of the recent conflict between Israel and Iran, I wanted to share some historical context. This might help you stay grounded during uncertain times.

Understanding Geopolitical Events

Major geopolitical events—wars, invasions, and political crises—are emotionally challenging. They often cause a spike in market volatility. But history shows that the S&P 500 has a remarkable ability to recover from these shocks.

In fact, after similar events, the S&P 500 has delivered an average return of 14.2% over the next 12 months. This statistic is reassuring to those worried about current events.

The Importance of Historical Perspective

This isn't about trying to predict the future—it's about learning from the past. While we can’t know exactly how markets will respond to any single event, history teaches us that staying invested is wise. Sticking to your long-term plan often yields positive results over time.

When alarmist headlines dominate the news, it’s easy to feel overwhelmed. But reacting emotionally to short-term events can lead to missed opportunities. Staying focused on your goals is critical, even when the world feels unpredictable.

Why Staying Invested Matters

In turbulent times, investing can seem daunting. Yet, remaining committed to your investment strategy is essential. The principle of staying invested allows you to take advantage of market recoveries.

Historically, even after the most significant downturns, markets have shown resilience. The natural ebb and flow of the economy means periods of decline are often followed by rebounds. This historical trend supports the notion that patience is a virtue in investing.

You might consider the phrase "financial planning is a journey" to encapsulate this mindset.

Strategies for Navigating Market Uncertainty

So, how do we navigate this uncertain landscape? Here are several strategies to consider:

1. Diversify Your Portfolio: A well-diversified portfolio can reduce risk. It ensures that you're not overly exposed to any single asset class or investment.

   
   

2. Set Long-Term Goals: Define your financial objectives. Having clear goals helps you resist the urge to react to short-term market fluctuations.

   
   

3. Regularly Review Your Strategy: Scheduled reviews of your investments can help align your portfolio with your evolving goals. This way, you can make any necessary adjustments without panic-driven decisions.

   
   

4. Stay Informed: Understanding market trends and news events can aid decision-making. Knowledge is power. The more informed you are, the better equipped you'll be to handle market volatility.

   
   

Seeking Guidance

Need someone to talk this through with?

If you feel uncertain about your investment strategy, let’s schedule a call. Revisiting your financial plan together can provide clarity. You don’t have to navigate market uncertainty alone.

Schedule a Free Consultation

Conclusion

In summary, while the current geopolitical climate may be concerning, it’s essential to remember the resilience of financial markets. Embracing a long-term investment strategy can help you navigate these challenging times.

Take history as your guide and remember that staying focused on your financial goals is often the wisest choice.

Chart Sources:

Exhibit A, 2025 (exhibitaforadvice.com)

FactSet, 2025 (factset.com)

S&P Global, 2025 (spglobal.com)

Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.