Spring 2026 Market Volatility: What History Tells Us
In this video, I explain the recent stock-market volatility largely caused by the Iran War and oil prices.
Spring Market Volatility: What History Tells Us
Spring is here, and it seems like stock market volatility is in the air. With geopolitical tensions and headlines dominating the news cycle, it’s natural for investors to feel uneasy.
Let’s take a step back and look at what history can teach us.
Markets and Geopolitical Events
When major geopolitical events occur, markets often react quickly in the short term. But what’s more important is how markets have historically performed in the years that follow.
If we look at events such as the Cuban Missile Crisis, political assassinations in the 1960s, the September 11 attacks, the Iraq War, and the Russia–Ukraine conflict, we see a consistent pattern.
In the three years following the start of these events, the stock market has historically delivered positive returns. In many cases, those returns have been very strong, often in the double digits on an average annual basis.
That doesn’t mean every event unfolds the same way, and it doesn’t mean today’s geopolitical environment is identical to those in the past. It does suggest that markets have shown remarkable resilience over time.
Headlines vs. Long-Term Investing
It’s also helpful to study stock market alongside major geopolitical and economic headlines over time.
The key takeaway is that the market has always recovered.
Periods of uncertainty, including wars, recessions, political crises, and global economic shocks, have happened repeatedly. Despite all of them, long-term investors have historically been rewarded for staying invested.
For investors with a long-term perspective, this historical pattern is important to remember.
Oil Prices and Market Reactions
One concern that often arises during geopolitical conflicts, especially those involving the Middle East, is oil prices.
Historically, oil prices tend to spike following major geopolitical events. This can lead to short-term volatility in markets, however, when we look at broader trends, those spikes have never derailed long-term market growth.
There may be short-term choppiness, but over longer periods, the market has typically moved forward, tracking corporate profitability.
The Cost of Trying to Time the Market
One of the most powerful charts I like to study illustrates the opportunity cost of moving out of the market during volatile periods.
Imagine investing $1,000 in the Russell 3000 Index, a broad measure of the U.S. stock market, in 2001 and leaving it invested through the end of 2025.
That investment would have grown to roughly $8,300.
But what happens if an investor moves to cash and misses just a few of the market’s best periods during that time?
Miss the best week, and the portfolio falls to roughly $7,000.
Miss the best month, and it drops to around $6,600.
Miss the best six months, and the portfolio falls to about $5,400.
Those best-performing days, weeks, and months often occur during periods of heightened uncertainty, exactly when many investors feel most tempted to move to cash.
Staying Focused on the Long Term
I may sound like a broken record, but I want to reiterate that staying invested and maintaining a long-term perspective is one of the most important principles of successful investing.
Market volatility and unsettling headlines have been a constant distraction to long-term investing.
If your investment plan is aligned with your long-term goals, reacting to short-term news rarely improves outcomes.
We’ll talk more about this during our spring review meetings, but in the meantime, please don’t hesitate to reach out if you have questions or concerns.
I’m always happy to help!
Do you have questions about your investment portfolio? Reach out to me at Ben@coveplanning.com or schedule a free consultation call.
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Ben Smith is a fee-only financial advisor and CERTIFIED FINANCIAL PLANNER™ (CFP®) Professional with offices in Milwaukee, WI, Evanston, IL and Minneapolis, MN, serving clients virtually across the country. Cove Financial Planning provides comprehensive financial planning and investment management services to individuals and families, regardless of location, with a focus on Socially Responsible Investing (SRI).
Ben acts as a fiduciary for his clients. He does not sell financial products or take commissions. Simply put, he sits on your side of the table and always works in your best interest. Learn more how we can help you Do Well While Doing Good!
Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Ben Smith, and all rights are reserved. Read the full Disclaimer.