Staying Calm During Uncertain Times: A Perspective for Investors in the Middle East
Over the past few days, tensions in the Middle East have understandably created a lot of concern. For those of us living and working in the region, these events can feel particularly close to home. News headlines, market movements, and social media commentary can easily amplify that sense of uncertainty.
Before we talk about investments or markets, it’s important to say something that matters far more than portfolio values or financial plans.
People’s safety and wellbeing always come first.
If you’re currently in the region, the most important thing is that you and your family remain safe. Markets, investments and financial planning can always be reviewed later. Financial assets can recover. People’s lives and wellbeing are what truly matter.
With that said, many clients and readers have asked a natural question over the past few days:
“Should I be worried about my investments right now?”
The short answer, in most cases, is no immediate action is required. Periods like this are uncomfortable, but they are also something financial markets have experienced many times before.
Let’s take a calm look at what is actually happening.
What We’re Seeing in Markets Right Now
When geopolitical tensions increase, markets tend to react quickly. Investors dislike uncertainty, and when uncertainty rises, prices can move in the short term.
Over the past few days we’ve seen a fairly typical reaction:
- Global equity markets have experienced modest volatility
- Oil prices have risen
- Some investors have temporarily moved towards defensive assets
For example, in recent days:
- Oil prices have risen roughly 5–10% depending on the benchmark
- Major global equity markets have moved around 2-4% in either direction as investors digest the news
- Gold, which is often seen as a defensive asset, has ticked up slightly as well
While these movements can make headlines, it’s important to keep them in perspective.
A 2–4% market move, even over a few days, is actually very normal in global investing.
In fact:
- The global stock market typically experiences a 5–10% correction almost every year
- A 10–20% decline occurs roughly once every 4–5 years
- Despite this, global markets have historically delivered around 7–10% average annual returns over the long term
Volatility is uncomfortable, but it is not unusual.
Why Oil Prices Often Move First
The Middle East plays a significant role in global energy supply, so when tensions rise in the region, oil prices tend to react quickly.
Higher oil prices can create concerns about inflation, which can influence expectations for interest rates and economic growth.
However, markets are constantly processing new information. Investors quickly adjust expectations based on what is actually happening rather than what might happen.
At the moment, market movements do not suggest expectations of a severe global economic disruption.
Instead, what we are seeing is a fairly typical short-term reaction to geopolitical uncertainty.
What History Tells Us
One of the most helpful things during times like this is to step back and look at history.
Markets have faced many serious global events over the past century, including:
- The Gulf War
- The Iraq War
- The 2008 Global Financial Crisis
- The COVID-19 pandemic
- The war in Ukraine
In each of these situations, markets initially reacted with volatility. That’s normal.
But over time, something remarkable tends to happen.
Markets adapt. Businesses continue operating. Economies adjust. And eventually markets recover.
For example:
- After the Gulf War in 1990, markets recovered within months.
- After 9/11, markets recovered and went on to reach new highs in subsequent years.
- During the COVID pandemic, markets initially fell sharply before recovering within weeks and faster than many expected.
This doesn’t mean markets won’t experience short-term fluctuations. They almost certainly will.
But history consistently shows that long-term investors who remain disciplined tend to be rewarded.
Ready to Take the Next Step?
If you would like to discuss your financial plan or simply want reassurance during uncertain times, you’re welcome to book a confidential discovery meeting.
No pressure, no obligation — just a conversation about where you are today and whether your current strategy supports your long-term goals.
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