Periods of geopolitical tension often dominate the headlines, and the recent developments involving the US, Israel, and Iran are no exception. Naturally, events like these increase uncertainty.
However, markets react quickly. Prices reflect the collective views of millions of participants, each interpreting developments as they unfold. While we cannot predict how the situation will develop, markets will adjust as new information emerges, and short-term movements remain largely unpredictable.
Why Headlines Don’t Tell the Whole Story
Despite recent concerns, global markets remain positive year-to-date in GBP terms. Value shares, small-cap companies, emerging markets, and commercial property have all contributed additional gains, offering useful diversification. High-quality bonds have also remained resilient.
This demonstrates the strength of a well-diversified portfolio: by spreading exposure across multiple sources of return, no single event can dictate overall outcomes.
Figure 1: Market returns in 2026
Data source: see endnote. Returns in GBP to 04/03/2026.
Short-term volatility following geopolitical events is normal. A few days of market movement rarely provide meaningful insight. Prices are simply adjusting as new information becomes available, a process that will continue as events evolve.
Staying Disciplined During Market Stress
Moments like these can make investors question whether action is needed. In most cases, the answer is no. Periods of market stress, whether triggered by conflict, pandemics, political events, or economic surprises, are a normal part of investing. While they may feel uncomfortable, they are not unusual.
Figure 2: Every year the market falls
Data source: Albion World Stock Market Index. Returns in GBP from 01/01/2007 to 03/03/2026.
Even in strong years, temporary declines are common. Falls of 10% or more occur regularly. Investors who remain disciplined, diversified, and patient have historically achieved returns comfortably above inflation over the long term. Volatility is part of the process that generates long-term growth.
Focus on the Long Term
We cannot know how the situation in the Middle East will unfold, and day to day market movements remain difficult to predict. What we do know is that a well structured, globally diversified portfolio is designed to navigate periods of uncertainty.
Markets incorporate new information quickly, meaning current prices already reflect the expectations of investors worldwide. Staying focused on long-term objectives, rather than reacting to short-term noise, has consistently served investors well.
Get in Touch
If you’d like to take a closer look at your investment plans or have a conversation about your portfolio, we’re here to help. At Wells Gibson, we take the time to understand your goals and show how a diversified approach can give you confidence, no matter what the markets are doing.
Risk Warning
This article is provided for information and general awareness purposes only and is not personal financial advice. It does not recommend any specific investment, course of action, or strategy.
The content discusses market movements, diversification, and global events, such as geopolitical tensions in the Middle East. The examples and commentary are for general illustration only and may not reflect your individual circumstances.
The value of investments and any income from them can fall as well as rise, and you may not get back the amount originally invested. Past performance is not a reliable indicator of future results.
Market events, political developments, or economic surprises can cause short-term volatility, which is a normal part of investing. This article does not take into account your personal objectives, financial situation, or risk tolerance, so professional financial advice should be sought before making any investment decisions.
Wells Gibson Limited is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 731027).
Data Source Endnote
| Asset Class | Proxy ETF | Identifier |
|---|---|---|
| Developed market | UBS Core MSCI World ETF USD dis | IE00B7KQ7B66 |
| Developed value | Avantis All Equity Markets Value ETF | AVGV |
| Developed small | iShares MSCI World Small Cap ETF USD Acc | IE00BF4RFH31 |
| Emerging market | UBS Core MSCI EM ETF USD dis | LU0480132876 |
| Property | HSBC FTSE EPRA/NAREIT Developed ETF | IE00B5L01S80 |
| Short-dated Gilts | iShares UK Gilts 0-5yr ETF GBP Dist | IE00B4WXJK79 |
