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You may have seen the news over the weekend. The conflict between the US and Iran has escalated significantly, and markets have reacted accordingly. I wanted to reach out personally, as I did with my two previous updates, to give you a clear picture of what’s happening and more importantly what it means for your financial plan.
Here is where we stand this morning:
Global stock markets have fallen sharply. European stocks have entered correction territory, with the Stoxx Europe 600 down 1.8%, and Japan’s Topix dropped 3.4%. Oil has surged, with Brent crude climbing above $113 per barrel, though still below its conflict high of $119. Gold, which many people think of as a safe haven, has actually fallen more than 4% this morning, as expectations that elevated oil prices will keep US interest rates higher for longer have weighed on the precious metal.
The trigger for this latest move is serious. President Trump threatened a massive strike on Iranian power plants if Tehran does not reopen the Strait of Hormuz by midnight GMT tonight. Iran has responded by threatening to target energy infrastructure and water desalination plants across the region. Explosions have been reported in Tehran this morning, and Iran has launched missiles at Israel and its Gulf neighbours.
I have been doing this since 1995. I have sat with clients through the dot-com crash, 9/11, the financial crisis of 2008, the pandemic, and multiple geopolitical shocks. Every single time, the headlines have felt unprecedented. Every single time, investors who stayed the course came out stronger than those who panicked.
That is not wishful thinking, it is the evidence.
When you and I built your financial plan together, we built it to withstand exactly this kind of turbulence. We did not assume smooth markets. We assumed the world would, from time to time, be frightening. Your portfolio is structured to reflect that reality.
In most cases, the answer is nothing.
I know that can feel uncomfortable when the news is this dramatic. But reacting to short-term market noise, selling when markets fall, waiting for things to “calm down” before reinvesting is one of the most reliable ways to damage your long-term returns. You would be locking in losses and almost certainly missing the recovery.
If you have plans to draw down money in the next 5-years we’re not aware of, then please do get in touch so we can review your position together. That is exactly what our ongoing relationship is for. However if we’re aware of this, we would have positioned your portfolio accordingly, and no action is necessary.
The Lexington strapline has always been that true wealth is what money can’t buy, nor death take away. Times like these remind us why that matters. The markets will be volatile for as long as this conflict continues. That discomfort is real, but so is the financial plan we have built to protect your future through it.
I will continue to update you as the situation develops. As always, my door is open.
Warm regards,
Warren Shute CFP™ MSc.
Chartered Financial Planner
Lexington Wealth Management
