What the Conflict in Iran Means for Investors
The U.S. and Israel launched major attacks on Iran over the weekend with the stated objective of destroying Iran’s ability to obtain a nuclear weapon. Military action has resulted in the death of Iran’s Supreme Leader and many senior leaders in his government. News reports indicate there have been several American casualties so far, and the President has said there may be more to come. Iran and its proxies are retaliating by carrying out attacks on America’s allies seeking to destabilize the Gulf region. Oil prices have spiked, as is typical when tensions in oil-producing regions escalate, and gold has taken a leg up as often happens during a war scare. While the action against Iran is certainly a significant military and political event with far-reaching consequences, so far, the stock market is largely taking it in stride.
Geopolitical crises and distant wars do not tend to hold back the market for very long, though it is common to see volatility as the news breaks. Post-9/11, the S&P 500’s largest and most prolonged drawdown was related to the 2019 Saudi Aramco drone strike, which led to a retracement of 4% over the following 19 days with a full recovery requiring 41 days. The average total drawdown of such crises going all the way back to Pearl Harbor is a decline of 5%, reaching a bottom in 22 days followed by recovery in 47 days.
Combat operations are chaotic by nature. A well-known military maxim is that “no plan survives first contact with the enemy.” While the intent may be to have this wrapped up within a few weeks, it cannot be taken for granted. It is early in the situation’s development, and too soon to determine the full market impact; however, as long-term investors, for now, we do not believe the situation warrants a shift in strategic direction of our clients’ portfolios. Please feel free to reach out to [email protected] with any questions or feedback, or contact your financial advisor directly.
Written by our partners at Broadway Wealth Management Portfolio Management Group.
Disclosures:
WARRANTIES & DISCLAIMERS
There are no warranties implied.
Broadway Wealth Solutions (“BWSI”) is a registered investment adviser located in San Antonio, Texas. BWSI may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements. BWSI’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of BWSI’s web site on the Internet should not be construed by any consumer and/or prospective client as BWSI’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by BWSI with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of BWSI, please contact the state securities regulators for those states in which BWSI maintains a registration filing. A copy of BWSI’s current written disclosure statement discussing BWSI’s business operations, services, and fees is available at the SEC’s investment adviser public information website – www.adviserinfo.sec.gov or from BWSI upon written request. BWSI does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BWSI’s web site or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
This website and information are provided for guidance and information purposes only. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy. This website and information are not intended to provide investment, tax, or legal advice.
Insurance products and services are offered and sold through BWSI and individually licensed and appointed insurance agents.
