The current tensions surrounding Iran are understandably causing nervousness. Oil reacts immediately, indices fluctuate, headlines roll over. It is precisely at times like these that it is worth taking a look back.
In 2019, after the attacks on Saudi oil facilities, the oil price rose sharply for a short time - a few weeks later, the effect was largely digested.
In 2020, after the killing of Qasem Soleimani, the markets reacted with a risk-off move - the S&P 500 $CSPX (+1,24%) was trading higher a few months later.
Even major geopolitical shocks in recent decades have mostly led to temporary volatility in globally diversified portfolios, not to structural bear markets - provided there was no massive consequential economic damage.
Geopolitics creates uncertainty. However, lasting market slumps are usually caused by systemic financial problems or recessions - not by political escalation alone.
Investors should distinguish between noise and long-term value creation. Check liquidity, know the risk structure, but do not make panic decisions.
Discipline beats drama.
