As we look back on the past quarter, it’s worth revisiting an excerpt from our start-of-year newsletter, where we discussed our market outlook:

“Despite the positive backdrop, markets can shift quickly. Last year’s tariff-driven volatility is a reminder that external shocks matter. Already in 2026, a major geopolitical event has unfolded, and its full impact remains uncertain.”

At the time, that reference was to developments in Venezuela, and concerns were centered around potential spillover effects. In hindsight, that episode now feels like a distant memory. Over the past few months, global markets have instead been dominated by headlines surrounding the ongoing with Iran, bringing renewed uncertainty to the forefront.

As tensions escalated, we saw a sharp rise in market volatility and energy prices, reminding investors just how quickly sentiment can shift. Day-to-day developments have made it feel nearly impossible to predict what comes next leading to an uncomfortable environment for even the most disciplined investors.

Rather than attempting to forecast headlines, history offers a more useful guide.

Looking back at major geopolitical events dating to World War II, markets have often reacted negatively in the short term. One month after such events, equities are typically lower as uncertainty peaks and risk aversion rises.

However, the longer-term outcomes tell a different story.

Twelve months after a geopolitical shock, markets have been positive nearly two-thirds of the time. This pattern highlights an important reality: markets tend to absorb uncertainty, adjust expectations, and refocus on fundamentals more quickly than headlines would suggest.

While short-term reactions are often negative, history shows that markets have delivered positive returns 12 months after geopolitical events approximately two-thirds of the time.

This visual reinforces why emotional reactions to breaking news rarely align with long-term investment success.

Despite the steady stream of global headlines, several positive developments in the U.S. have received far less attention.

• Corporate Earnings: Fourth-quarter earnings exceeded expectations across many sectors. When strong earnings are paired with temporary valuation compression driven by uncertainty, they may create a constructive setup for future returns—a dynamic we’ve already begun to see play out in April.  In as of this writing (April 22, 2026, the S&P500 is under just over 12% since March 30th.

• Labor Market: February delivered a downside surprise with reported job losses, but that number was quickly overshadowed by a much stronger-than-expected March report. Overall unemployment remains historically low at approximately 4.3%, signaling continued labor market resilience.

• Economic Growth: The next major data point in focus is GDP growth, currently expected to fall in the 1–2% range. While modest, this level of growth reflects an economy that continues to expand despite higher interest rates and external pressures.

Periods like these test investor patience. Markets dislike uncertainty, and geopolitics injects uncertainty by its very nature. But history consistently shows that short-term volatility does not dictate long-term outcomes.

Staying grounded in fundamentals, maintaining diversification, and keeping a long-term perspective remain the reliable tools investors have at their disposal, especially when headlines are at their loudest. 

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