Lessons From Past Conflicts for Today’s Stock Market

As strikes on Iran continue and the Strait of Hormuz remains effectively closed, it’s clearly too early for market watchers to stop thinking about geopolitical risk. As discussed in recent commentaries but worth repeating, history shows stocks often recover quickly from wars and other military engagements, especially when economies are resilient and earnings fundamentals remain strong. Improved valuations, the strong earnings outlook, and a still normal level of volatility suggest the risk‑reward backdrop for stocks is getting more favorable. That said, we don’t have market capitulation signals flashing (washed-out selling), nor do we have any more clarity on how the Strait of Hormuz opens up. For now, we believe the best course of action for investors is to be patient and wait for a better entry point to add equity risk.