by Kevin Slater, Lead Advisor & CEO

The war between the U.S. and Israel, and Iran feels like it will have significant long-term impacts. How will future oil prices be affected? How will global political alliances shift? How will trade be impacted? These are important questions—and ones to which none of us yet has a clear answer.

Those questions naturally lead to another: Do I need to make changes to my investment portfolio? While we don’t know the full answer, history gives us some perspective—particularly when it comes to the largest holding in most portfolios: large-cap US stocks.

Wars are, by nature, incredibly disruptive. From the chart below, we can see that more often than not, long-term US investors have experienced positive returns despite the chaos surrounding global conflicts. This chart tracks the market return of large US companies one, five, and ten years after various wars begin.

It may be tempting to take a cynical view and attribute this to war profiteering. However, the data shows that returns are often positive even in the short term and tend to improve further after conflicts conclude.

Given this, we are not making any immediate changes to client equity allocations. We remain invested across both US and international markets, recognizing that different outcomes may impact companies and regions in different ways.

On the fixed income side, we have made a small adjustment. As interest rates have risen, we sold BondBloxx 6M US Treasury (XHLF) and purchased Vanguard Core Bond (VCRB) to take advantage of higher yields. We anticipate making one or two similar adjustments within fixed income over the course of the year.

We will continue to communicate as our thinking and strategy evolve. As always, we welcome your questions and conversations as we navigate these times together.