Watching conflict unfold in the Middle East is deeply unsettling. Our thoughts are with every person affected by the human cost of what’s happening. It’s also completely understandable if your mind has drifted toward your financial future and what impact this war may have on it.
During turbulent times like these, it’s not unusual to wonder: “Will I be okay financially? How will this affect my family? Should I make changes to my portfolio?”
In this blog, we will explore what history can tell us about market and war. Additionally, you will find four proactive wealth management steps you can take in effort to better secure your future and explore wealth management opportunities during times of uncertainty.
What Can History Actually Tell Us About Markets and War?
Here’s what most investors don’t realize: while wars all have their unique circumstances, conflict has been a near-constant feature of the last 100 years — and the stock market has a remarkable track record of pushing through it.
Research examining U.S. stock returns following major geopolitical events over the past century consistently points to the same conclusion: more often than not, markets are higher — not lower — in the months and years after a conflict begins.
Across a broad sample of conflicts since World War II, the S&P 500 produced positive returns in the subsequent year roughly 73% of the time. And when researchers extended the window to three years, positive returns appeared in every single case examined — with an average annualized gain of around 13%.
Source: https://res.cloudinary.com/americancentury/image/upload/docs/avantis-monthly-newsletter-intm.pdf
That doesn’t mean the ride is smooth. The short term is a different story. In 20 major post-World War II military interventions evaluated by analysts at RBC, the S&P 500 fell an average of 6% from the initial market impact to the trough — but in 19 of those 20 events, the market recovered to pre-event levels in an average of just 28 days. The short-term pain is real. The long-term pattern is clear.
What About Global Markets — Not Just U.S. Stocks?
The good news extends well beyond U.S. borders. Data on non-U.S. developed markets and emerging markets following major conflicts since 1990 tells a similar story: while near-term outcomes showed more variation outside the U.S., three-year returns after each conflict examined were again positive in every case. The evidence for investor discipline isn’t limited to Wall Street — it holds globally.
Source: https://res.cloudinary.com/americancentury/image/upload/docs/avantis-monthly-newsletter-intm.pdf
This is why at One Life Financial Group, we believe in considering globally diversified portfolios, and this moment is a good reminder of why that can matter.
Research from Dimensional Fund Advisors makes a compelling case: it’s exceedingly difficult to predict which markets will outperform, and in the 20 years from 2006 through 2025, annual returns across 22 developed markets varied dramatically year to year — with no discernible pattern for identifying winners in advance. A portfolio spread across markets around the world isn’t just a hedge against volatility in any one region — it’s designed to capture growth wherever it surfaces.
Non-U.S. stocks had a standout year in 2025, with both developed and emerging markets returning more than 30% — sharply outpacing the U.S. market. Investors who maintained broad global exposure were rewarded in a meaningful way. That kind of diversification doesn’t predict the future, but it does ensure you’re never entirely left out of it.
Markets Don’t Fear War as Much as They Fear Uncertainty
Here’s the thing about uncertainty: it tends to be highest right at the start of a conflict — precisely the moment when emotional reactions to sell are strongest, and typically the worst time to act on them.
When military conflicts break out, it’s typical for stock market volatility to rise amid initial fear. Yet history shows that market pullbacks from geopolitical events are typically short-lived and have minimal impact on long-term stock market performance.
When you try to time the market, you have to make two calls — when to exit and when to get back in. Miss one of them, and you’ve likely done more damage than the geopolitical event itself. Some of the biggest single-day recoveries in market history have occurred in the immediate aftermath of major sell-offs. Investors who fled to the sidelines didn’t just miss the bad days — they missed the bounce.
Why a Long-Term Perspective Can Change Everything
Think about what a long-term chart of market history actually looks like. Plotted against nearly a century of growth (as shown below), the conflicts, crises, and corrections that felt catastrophic in the moment appear as minor disruptions in a longer upward trajectory. World War II. Korea. Vietnam. The Gulf War. 9/11. The Iraq War. The Great Financial Crisis. COVID-19. Ukraine. Investors who stayed invested through all of it are in a fundamentally different position than those who tried to trade the headlines.
A financial plan should be designed with this in mind — not for the easy stretches, but for the uncertain ones. The question isn’t whether volatility will come. It always does. The question is whether your plan can withstand it and keep working for you over the long haul. For most of our clients, the answer is yes — and we can show you exactly why.
Four Steps to Take Right Now
If you’re feeling anxious, here are four constructive things you can do with that energy:
- Check your emergency reserve. A liquid cash cushion covering three to six months of essential expenses isn’t just a financial best practice — it’s most often the single biggest source of peace of mind during market turbulence I’ve observed over the last 23 years as an advisor. With a properly structured emergency reserve in place, it can help provide protection against having to sell stocks at a loss to cover an unexpected expense
- Put your plan through a stress test. Many clients find that running their financial plan through hypothetical stress tests — a 20–30% market drop, higher inflation, reduced Social Security benefits — actually reduces anxiety rather than adding to it. Seeing the numbers in black and white can transform “what if” worry into grounded confidence, especially if your plan’s probability of success remains strong after running a stress test. If you’re a current One Life client, log into Right Capital and click on Stress Test to see how your plan holds up, or ask your advisor to run one for you during an upcoming review.
- Tune out the noise and trust the process. The headlines will be loud. The commentary will be dire. That’s the nature of a 24-hour news cycle, and it’s not calibrated to your 20-year financial goals. Adopting a long-term perspective — and having a trusted advisor in your corner — is one of the most powerful competitive advantages a long-term investor can have.
- Look for wealth maximization opportunities. If you’re a One Life client and have not yet scheduled your annual review as part of our Proactive Wealth Maintenance Calendar, now could be a great time to get that scheduled with your advisor to explore opportunities in down markets or explore other opportunities (e.g. tax loss harvesting, Roth conversions, etc.).
One final opportunity in down markets is looking for a deal with your excess cash. Valentines Day recently ended, and I saw some sales where dark chocolate hearts (my favorite!) were 50% off. I could get twice the chocolate for the same amount of money.
If the market is down, and you have excess cash (above and beyond your reserve goals), a similar “discount” investment opportunity might be available where you could potentially buy more shares of stock for your financial future.
Click here to read more about how adopting a long-term perspective can help change how investors view market volatility and help you look beyond the headlines.
You Don’t Have to Navigate This Alone
Life is too short to worry about money. And at One Life, our whole purpose is making sure you don’t have to.
If you’d like to talk through what’s happening in the markets, stress-test your specific plan, explore tax mitigation strategies, or simply get some more information on your plan, schedule a complimentary initial visit with us. We’re here —no pressure just clarity.
All information and ideas should be discussed in detail with your individual advisor prior to implementation. Investment advisory services offered through One Life Financial Group, Inc. Past performance does not guarantee future results. Investing involves risk, including possible loss of principal. One Life Financial Group, Inc. does not provide tax preparation services. Contact your accountant prior to making any changes to your strategies to ensure they will work out as intended.