Markets
Will geopolitical conflict impact my portfolio?
By Jared Kadziolka, CFA 22 April 2026 2 min read
In a world of 24-hour news cycles and constant social media updates, geopolitical headlines can feel overwhelming. Whether it’s conflict, political shifts, or global health crises, these events are deeply felt human experiences that naturally command our full attention and, at times, our anxieties—be it concern for other people or how these events will impact things closer to home. For investors, the natural instinct is to ask: “How will this impact my portfolio?”
The data, however, suggests taking a different approach. Looking back at history, the market’s reaction to geopolitical shocks is often much more resilient than the headlines would lead us to believe.
The reality of market resilience
As the chart below illustrates, the stock market (as measured by the S&P 500 Index) has a remarkable track record of looking past global uncertainty.1 While the initial shock and uncertainty of an event might cause short-term volatility, the one-year return after the event’s onset has typically told a story of recovery and growth.
S&P 500 performance after major geopolitical events
Source: YCharts
- Positive outcomes are common: Despite the gravity of events like the Cuban Missile Crisis, the Iraq Invasion, or the recent Israel-Hamas War, the market was significantly higher one year later.
- The average is encouraging: Across the major geopolitical events tracked since the 1950s, the average one-year forward return for the S&P 500 is 11.4%.
- Outliers exist, but context matters: Significant downturns, such as the 1973 OPEC Oil Embargo (-35.3%) or the 9/11 Attacks (-16.7%), were often tied to broader economic shifts—like stagflation or a pre-existing tech bubble burst—rather than just the geopolitical event itself.
Why markets "look past" the headlines
Investors often equate distressing news for "bad" economic news. While a geopolitical event might be world-changing in a social or humanitarian sense, it won’t necessarily impact markets, which are ultimately driven by:
- Interest rates: What is the cost of borrowing?
- Economic growth: Is the global economy still expanding?
- Corporate earnings: Are companies still generating strong profits?
Unless a conflict is expected to fundamentally alter these three pillars on a long-term basis, the market tends to treat the event as a temporary disruption and see past it.
The bottom line for your portfolio
Geopolitical events are, by their very nature, impossible to predict. Attempting to time the market based on the latest news alert often results in missing the subsequent recovery.
A well-constructed, diversified financial plan is built to withstand these moments of uncertainty. Rather than reacting to the noise, the most successful strategy is to remain focused on your long-term goals.
History shows that while the world is unpredictable, the resilience of the markets is a much more reliable bet.
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Past performance is not indicative of future performance.
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