The world feels unsettled once again. Geopolitical tensions are flaring across the Middle East, Asia, and Eastern Europe, stirring familiar anxieties about conflict, economic disruption, and uncertainty. As advisors who have guided clients through countless cycles of turmoil, we’ve witnessed this pattern repeatedly: the intense fears and sharp market reactions of the moment often fade over time, giving way to adaptation, resilience, and renewed growth.
Today’s headlines echo the late 1960s and early 1970s in striking ways. The Vietnam War prolonged uncertainty in Asia, while the Six-Day War and Yom Kippur War in the Middle East sparked oil embargoes, persistent inflation, and deep economic strain. An entire generation grappled with disorientation amid global chaos.
Author James A. Michener captured that spirit in his 1971 novel The Drifters. This book traced young people wandering through Europe and North Africa, escaping drafts, expectations, and seemingly endless turmoil. Beneath the restlessness of the time, Michener reveals a deep truth: cooler heads prevail, crises pass, societies adapt, memories soften, and life moves forward.
Just as those young drifters found their way, history shows that patient investors who can navigate volatility without throwing their hands up and pulling out of the market have been rewarded. The S&P 500 plunged nearly 48% during the 1973–1974 bear market and oil crisis, yet it delivered roughly 11% annualized returns over the following decade.
As this chart illustrates, sustained participation in quality investments has historically outperformed any attempt to time entries and exits. This means even if you had invested 100% of your portfolio at the worst possible time, you have an 85% chance of a positive return after 3 years, a 95% chance of a positive return after 10 years, and a 100% chance of positive returns over any 20 year rolling period. This time period includes the Great Depression. Even those who invested all of their money in September 1929 eventually saw a positive return in their portfolio.
For you, this means resisting the pull of fear- or greed-driven shifts in your portfolio.
Berkshire Hathaway co-founder Warren Buffett provides timeless guidance for these moments. He reminds us that “the stock market is a device for transferring money from the impatient to the patient.” Buffett advocates owning quality businesses you would hold indefinitely and tuning out the short-term noise and price movement.
Morgan Housel, in his acclaimed book The Psychology of Money, drives home the behavioral side: “Doing well with money isn’t necessarily about what you know. It’s about how you behave.” He adds, “If you want to do better as an investor, the single most powerful thing you can do is increase your time horizon.”
Together, they teach that reacting emotionally to headlines often means buying and selling at the wrong time, while steady discipline allows compounding to work its magic.
This may seem like a distant memory, or an intentional omission, but do you ever think about how chaotic markets and the economy felt in 2020 during the Coronavirus pandemic? Global supply chains crumbled, businesses were forced to shut down, and people were pressured to stay home. From peak to trough, the Dow Jones Industrial Average (DJIA) index declined by approximately 37% over this period. To many investors, this period felt like an existential crisis when it happened. Yet now it looks like a blip on the long-term picture.
Since the late 1920s, major U.S. stock indices like the DJIA have experienced significant declines periodically. Bear markets (20%+ drops) have occurred on average every 4 to 5 years (closer to every 5.1 years since 1945), and 10%+ corrections have happened more routinely—often every 1 to 2 years, or roughly once a year in many historical periods. While divergences from past patterns are always possible due to evolving economic, geopolitical, or policy factors, it is wise to respect historical performance. Recoveries from bear markets have taken months or years – sometimes longer in extreme cases like the Great Depression – but U.S. markets have always eventually recovered from previous bear markets.
Here are some practical recommendations to help navigate uncertain times:
- Maintain a long-term perspective: Focus on your investment horizon rather than daily headlines. Historical data shows that staying invested through cycles has rewarded patience far more than trying to time the market.
- Review and rebalance your portfolio thoughtfully: Use periods of volatility to ensure your asset allocation still aligns with your risk tolerance and goals, but avoid heavy changes. Trade “at the margins”. Once you settle into the right investment mix, make subtle changes over time to smooth out market volatility.
- Maintain defensive investments: Keep a predetermined amount in cash or equivalents to help you avoid forced selling during downturns. Decide what level of cash or defensive assets is enough to keep you comfortable (an advisor can help)
- Diversify across quality assets: Own a mix of high-quality equities, defensive assets, and other holdings that can weather storms, protect your purchasing power, and participate in recoveries.
- Consult your advisor regularly: Schedule check-ins to discuss adjustments, tax strategies, or opportunities that arise from market movements.
Like Michener’s drifters who started out lost but eventually found direction, investors who maintain discipline through turbulence often come out stronger. Having first read The Drifters when I was younger, I always appreciated the opening words: “Youth is truth”. They carry a timeless reminder that beneath the surface of upheaval lies enduring truth: crises, no matter how intense they feel in the moment, are temporary chapters in a much longer story of adaptation and progress.
For investors watching things globally, will these forces that have prevailed through previous wars, oil shocks, pandemics, and recessions continue to operate reliably? Or will this time be different? Perhaps, but we would suggest caution in assuming so. Countless bearish voices have labeled previous peaks and crises as terminal, only to watch markets adapt, innovate, problem-solve, and climb higher.
By staying anchored to quality assets, a measured approach, and a multi-generational horizon, you position not just your portfolio – but your family’s legacy – to weather the present unrest and protect your purchasing power. History doesn’t promise a smooth path – it actually promises volatility – but it does affirm that patience and perspective have rewarded those who hold steady. In uncertain times, that quiet confidence is your greatest asset.
– Kyle Wasson, CFP®
