Things that are incompatible with investing

The situation escalated further in Israel over the weekend. It always feels a little campy to talk about investing when lives are being lost, but part of my job is to help investors put horrific world events into context.

Intuitively, you might think that geopolitical events would affect the market. It is true that investors generally tend to sell risky assets first and ask questions later. However, over time, the market becomes more focused on profits than anything else.

That’s evident in this chart of how the S&P 500 has reacted to geopolitical events one year later.

Too many rows can make the numbers look a little weird. Here are the facts, Jack. The median return is 13%. The average yield is 5%. But if you exclude the Yom Kippur War, which occurred in the midst of a secular bear market, the average return jumps to 8%.

The conclusion is: The world is a scary place. That’s what always has been and always will be. Don’t let it come between you and your portfolio.

Josh and I will cover this and more on tonight’s show what are your thoughts?