Resources/Weekly Insights

Volume 15, Edition 8 | March 2 - March 8, 2026

When Discipline Matters Most

Doug Walters, CFA

Periods of geopolitical and economic uncertainty can test even the most disciplined investors. In this Insight, we look at what history teaches us about market behavior during times of stress, and why staying invested has mattered far more than reacting to headlines.

Contributed by Doug Walters, David Lemire, Max Berkovich, Matthew Johnson

Periods of geopolitical conflict, like the one unfolding in the Middle East this week, understandably stir investor anxiety. The headlines are unsettling, the outcomes unknowable, and the instinct to “do something” can feel overwhelming. History, however, offers a valuable reminder: markets have often delivered surprisingly strong results during and shortly after times of extreme uncertainty.

I’m going to try to walk a line… I’d like to raise some notable examples of market uncertainty, while not implying that we are at one of these points. After all, I have no crystal ball. If you feel comforted by the end of this article, then I succeed. If not, my apologies.

Historical Precedent

So, let’s take a big step back in time to the 1940s, one of the darkest periods in our history. Between the start of 1940 and the end of 1945, U.S. equities rose around 13% per year, despite relentless negative news, rationing, and global destruction. And World War II is not an anomaly. U.S. stocks generated positive returns during most major modern wars, including World War II and the Korean War, even as uncertainty dominated the narrative.

A more recent example is the COVID-19 pandemic. In March 2020, fear was pervasive: global economies were shutting down, unemployment was surging, and the future felt deeply uncertain. Yet the S&P 500 bottomed on March 23, 2020, and went on to double over the next 16 months. Anyone who exited the market in response to uncertainty locked in losses, while those who remained disciplined participated in one of the strongest rebounds in market history.

It is not that somehow these tragedies drive outperformance. Rather, it is that equity returns during these moments are not destined to be poor. There are other factors at play… it could be the economic cycle or perhaps fiscal or monetary stimulus.

The Real Portfolio Danger

Given this, the real danger to portfolios during these moments is not volatility itself, but the behavioral mistakes it can provoke. One of the costliest is missing the market’s best days. Our work shows that missing the 10 best trading days in the S&P 500 over the past 30 years (that’s over 7,500 trading days) slashes annual returns from 10% to under 6%. Critically, many of those best days occur during periods of market stress, often clustered close to the worst days. Attempting to sidestep downturns frequently means also missing the recoveries that drive long-term wealth creation.

It sometimes feels counterintuitive, but equity markets are not a reflection of today’s headlines. Instead, they are a measure of investors’ expectations for future corporate profitability and growth. So, while uncertainty feels uncomfortable, we are here to help you through it. Evidence consistently shows that discipline, diversification, and adherence to a long-term plan have mattered far more than reacting to crises in real time.

In moments like these, you can take comfort know that the most prudent action is often the simplest: staying invested.

6%

Annual return of the S&P 500 when the 10 best days are missed

Over the past 30 years, the S&P 500 has provided a roughly 10% return to patient investors. Missing just the 10 best days out of those 7,500+ trading days, would cut that return to just 6%.

Headline of the Week

Busan’s Oil Shock

Global markets were shaken this week as the U.S.–Israel–Iran conflict escalated, triggering an energy shock centered on the Strait of Hormuz, one of the world’s critical oil chokepoints. South Korea, which imports roughly 70% of its crude oil from the Middle East, with more than 95% of that volume passing through the Strait of Hormuz, faced acute pressure as tanker traffic slowed to a crawl. This dependence compares starkly with the United States, where Persian Gulf crude represents only about 12% of total U.S. crude imports, leaving the U.S. far less exposed to a Hormuz disruption.

Financial contagion spread quickly through Korean markets as the KOSPI plunged 7% on March 3 and a historic 12% on March 4, its worst one‑day collapse ever, driven by fears that a prolonged Hormuz blockade could choke off Korea’s energy lifeline. Samsung Electronics and SK Hynix fell nearly 10–12%, and circuit breakers were activated as volatility exploded. Yet, as we discussed above, often the worst days are followed by some of the best. On March 5, the KOSPI rallied nearly 10%. While it was still a tough week for investors in Korea, exiting the market on the 4th would have been a huge mistake.

The Week Ahead

Inflation will dominate the news flow next week. The only diversion we get is Oracle’s earnings.

Foggy Vision

A rare week where we get not one, but two inflation reports.

On Wednesday, we get the Consumer Price Index (CPI), and on Friday, the Personal Consumer Expenditures Index (PCE) — the Federal Reserve’s favorite inflation gauge.
CPI is expected to be unchanged at 2.4% year-over-year.
PCE is expected to come in at 2.8%, but core PCE — which excludes food and energy — is expected to remain stuck at a stubborn 3%.
The PCE covers January, while the CPI is slightly more timely, covering February.
The fog of war, however, is the major wildcard — as bombs fly in the Middle East, oil and natural gas prices are climbing. Neither of these reports covers this period.
While America remains somewhat insulated, energy price moves have been deeply troubling in Europe, with oil climbing 20% and natural gas an eye-watering 60%.
The U.S. dollar is another factor to watch. After weakening 10% in 2025, the greenback is climbing back on its perceived safe-haven status.
The Federal Reserve will have to digest all of this on March 18th when it faces its next rate decision.

Half Off

On Tuesday, Oracle reports its earnings and will be a major focus for investors.

The stock had a huge run on its AI-related pivot in the first half of 2025, but has since given back roughly half those gains after peaking in September.
Since the run-up, attention has shifted from expected growth to the company’s massive debt load.
Analyst consensus calls for earnings growth of 16% in the quarter and a nearly 20% increase in revenue.
Cash flow will be closely watched — it turned negative last quarter and is expected to continue heading south.
Oracle recently borrowed $25 billion to fund a massive data center expansion and announced significant job cuts this past week to free up cash.

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