There are plenty of reasons to be uneasy about the Middle East these days. Higher oil prices continue to strain the global economy, international trade remains restricted, and the threat of a broader war persists.
Nearly two months into the current war with Iran, there's still no clear path out of the conflict. Like most geopolitical events, the timeline and outcome remain uncertain—it could last a few more weeks or extend much longer.
We've seen increased market volatility in recent weeks, and we may see more in the future. That part is normal. Markets tend to react quickly when uncertainty rises.
Still, it helps to step back and look at the bigger picture. And, to put things in perspective, consider US stock market performance over the past century, from 1926 through 2025.
Figure 1 illustrates the long-term growth of US stocks over that period, through wars, military actions, recessions, and other periods of stress. The broader lesson is that markets have a long history of moving through difficult events and rewarding disciplined investors over time.
Figure 2 shows how US stocks performed following the onset of military activity. For the 3-month and 1-year periods, the results were mixed, but generally postive—stocks mostly rose but sometimes declined. But the results for all 3-year periods were positive. This is a good reminder that, while volatility is always possible during major geopolitical events, markets do not always respond negatively following stressful periods.
Of course, none of this data tells us how the markets will perform in the 1- to 3-year periods following the Iran conflict. There are too many moving parts, and plenty of things that affect stock prices besides the current situation. But history does suggest that positive long-term returns can still be achieved following major geopolitical events.
In my view, it’s best not to out-guess the markets. A disciplined approach and a consistent strategy remain the most reliable pathways to your long-term goals.
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Source: Figures 1 and 2 are from the Avantis ETF Field Guide, February 2026. Data: US stocks from July 1926 - December 2025, Ken French Data Library, Indexes are not available for direct investment. Past performance is no guarantee of future results.