Remaining invested during periods of geopolitical tension has historically rewarded long-term investors.
Global conflicts and political instability often create uncertainty in financial markets, leading to temporary volatility. However, history shows that equity markets have demonstrated strong resilience even during major geopolitical crises.
Research on historical market performance indicates that stocks delivered positive returns one year after the start of armed conflicts in about 73% of cases since World War II. This suggests that while markets may react negatively in the short term, they often recover over time.
The key takeaway for investors is that longer investment horizons significantly increase the likelihood of positive returns, even during periods marked by geopolitical tension and global uncertainty.
| Geopolitical/Military Events | S&P 500 Index Price Return (%) | ||||
|---|---|---|---|---|---|
| Event (Start Date) | 3 Months Later | Annualized | |||
| 1 Year Later | 3 Years Later | 5 Years Later | 10 Years Later | ||
| Germany Invades France (May 1940) | -15.3 | -22.0 | -0.9 | 4.1 | 4.2 |
| Pearl Harbor Attack (December 1941) | -12.4 | 0.4 | 11.7 | 9.5 | 9.6 |
| Korean War (June 1950) | 1.5 | 11.2 | 8.1 | 16.4 | 11.7 |
| Cuban Missile Crisis (October 1962) | 17.4 | 32.0 | 18.3 | 11.4 | 7.0 |
| US Bombs Cambodia (April 1970) | -4.6 | 27.1 | 9.4 | 0.9 | 2.6 |
| Arab Oil Embargo (October 1973) | -13.2 | -36.2 | -2.9 | -1.4 | 4.4 |
| Iranian Hostage Crisis (November 1979) | 11.6 | 25.9 | 11.4 | 10.3 | 12.7 |
| USSR Invades Afghanistan (December 1979) | -8.8 | 26.2 | 9.1 | 9.0 | 12.4 |
| Beirut Bombing (October 1983) | -0.7 | 0.7 | 13.0 | 11.3 | 10.8 |
| US Invades Grenada (November 1983) | -1.1 | 0.7 | 12.8 | 11.2 | 10.8 |
| US Bombs Libya (April 1986) | -0.5 | 19.9 | 8.3 | 9.9 | 10.5 |
| Invasion of Panama (December 1989) | -2.9 | -6.9 | 7.5 | 5.6 | 15.0 |
| Iraq Invades Kuwait (August 1990) | -10.5 | 10.2 | 8.6 | 9.7 | 15.1 |
| Operation Desert Storm (January 1991) | 21.5 | 32.3 | 14.5 | 14.0 | 15.4 |
| Gorbachev Coup (August 1991) | -1.8 | 9.3 | 6.3 | 11.5 | 11.9 |
| World Trade right Bombing (February 1993) | 1.5 | 5.4 | 13.7 | 18.7 | 6.5 |
| 9/11 Terrorist Attacks (September 2001) | 2.5 | –16.7 | 0.9 | 3.5 | 0.6 |
| Iraq War (March 2003) | 15.6 | 27.0 | 14.3 | 8.2 | 5.9 |
| Russia Invades Georgia (August 2008) | -34.3 | -22.3 | -4.7 | 5.5 | 8.1 |
| Russia Invades Crimea (March 2014) | 3.9 | 10.7 | 8.0 | 7.9 | 10.6 |
| Russia Invades Ukraine (February 2022) | -13.0 | -11.0 | 9.5 | ||
| Hamas Attacks Israel (October 2023) | 9.7 | 33.6 | |||
| Israel Attacks Iran’s Nuclear Facilities (June 2025) | 8.9 | ||||
| US and Israel Attack Iran (February 2026) | ??? | ||||
| Median | -0.7 | 9.7 | 9.1 | 9.6 | 10.5 |
| % Positive | 43% | 73% | 86% | 95% | 100% |
Geopolitical Conflicts Have Had Minimal Impact on Long-Term Equity Performance
Growth of $10,000 in the S&P 500 Price Index (1940–2025)
Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. Data shown does not include the reinvestment of dividend payments. Data Sources: Morningstar, Ned Davis Research, and Hartford Funds, 3/26.
