Investing in Times of War: Keeping a Steady Hand Through Conflict
How geopolitical conflict affects markets, commodities and inflation, and why long-term investors benefit from patience, discipline and dollar exposure.
By Diego Alcalá · Sat Jul 25 2026 · Mindset
Geopolitical conflict is one of the recurring shocks every investor eventually has to face. Consider what happened in April 2024, when Iran launched hundreds of drones and missiles at Israeli territory, most of them intercepted with the help of the United States and the United Kingdom. Episodes like that one are a useful case study, because they marked an escalation of tensions in the Middle East that markets had to price almost overnight, and yet, they were not entirely a surprise: the attack had been telegraphed for days.
The goal here is not to run a geopolitical analysis or take sides in a global conflict, but to think through how events like these ripple into the global economy.
How conflict moves through markets
In episodes of this kind, markets tend to start adjusting before the event itself, cooling off rallies that may have been running for months. Oil, for example, rose by roughly 3% over the first two weeks of that April on fears that supply could eventually be disrupted, while gold, typically seen as a safe-haven asset, climbed nearly 6% over the same stretch.
When commodity prices spike like this, we can see upward pressure on inflation, and interest rates may take longer to come down, even in countries that have already begun cutting them.
The reality is that it is very hard to know in advance whether commodity prices will stay elevated, and by how much. In that same episode, oil was already falling again the following Monday. Volatility is the one thing you can reliably expect.
Speculating on how far and how long a conflict will escalate is exactly that, speculation. What we do know is that international institutions have historically had limited success containing these flare-ups, which is where the game of interpretation begins.
The key question in any such scenario is whether it will expand geographically. The outcome can never be predicted, but broader escalation is usually a scenario the countries involved would prefer to avoid. In the 2024 case, Iran signaled it did not intend to escalate further, its mission to the UN said the matter "can be deemed concluded," while Israel could plausibly treat its successful interception of the barrage as a victory and hold back from a direct offensive. The broader lesson holds regardless of the specific players: in the short term, stay attentive and risk-aware.
What to do with your investments
This kind of news can, and to some degree should, create uncertainty, and even make you a little anxious (which is normal; it happens to everyone who watches bad news). But with your long-term investments, you can still keep calm. It is in the short term where I would stay somewhat more risk-averse.
Although there is negative news every single day, over the long run market results have been consistently positive, as we saw in recent cases such as the 2020 pandemic. So if your investment horizon is long term, being patient and sticking to your original plan can be a good recipe.
In the end, any sustainable wealth plan has a component of time, a great deal of time, built into it.
If you chart how global equity markets have reacted to high-impact "black swan" events, from pandemics to recent wars, two things stand out. First, markets are anything but rational in the moment. Second, over the long run the trend has consistently pointed upward, which is why it is often said that a sound investment in any publicly traded market simply needs the extra ingredient of time to generate returns.
It is also worth considering investments with exposure to the U.S. dollar, since it tends to provide a hedge for investors in emerging-market economies. Exchange rates often rise in moments of uncertainty, so dollar-denominated holdings (such as dollar stocks and bonds) tend to appreciate for a non-U.S. investor precisely when local markets are under stress.
So how do you prepare to invest well in times of war? At Buying America, we help international investors build positions, often anchored in dollar-denominated U.S. assets, that are designed to weather exactly this kind of turbulence.