Investor Note · March 2026
Wars Don't Destroy Portfolios. Panic Does.
A data-driven note from our investment team on why staying the course remains the right approach.
Every War in 40 Years Was a Buying Opportunity
We plotted the S&P 500 quarterly since 1986 and marked every major geopolitical crisis. The pattern is unambiguous: sharp sell-offs, followed by full recoveries — every single time. The average drawdown across 20+ events is just 5%, and markets recover within 28 trading days on average. The current Iran-related drawdown (~5%) is tracking at the exact historical norm.
S&P 500 Index — Quarterly | ● = Geopolitical Crisis
S&P 500 Performance Following Major Geopolitical Events
Gulf War (1990)
9/11 (2001, dot-com overlap)
Iraq Invasion (2003)
Arab Spring (2011)
Russia-Ukraine (2022, Fed hike cycle)
Israel-Hamas (2023)
Iran Crisis (2026)
| Event | Drawdown | Recovery | 1-Year Return | 3-Year Return |
|---|---|---|---|---|
| Gulf War (1990) | (16.9%) | 131 days | +10.2% | +34.1% |
| 9/11 (2001, dot-com overlap) | (11.6%) | ~20 days | (10.1%) | +59% |
| Iraq Invasion (2003) | (5.6%) | 28 days | +33.1% | +62% |
| Arab Spring (2011) | (7.0%) | ~20 days | +12.4% | +50% |
| Russia-Ukraine (2022, Fed hike cycle) | (7.4%) | 27 days | (6.0%) | +40% |
| Israel-Hamas (2023) | ~0% | 0 days | +33.5% | N/A |
| Iran Crisis (2026) | (5.0%) | Ongoing | TBD | TBD |
Note: 9/11 and Russia-Ukraine 1-year returns were distorted by concurrent macro events (dot-com bust and aggressive Fed tightening respectively), not the conflicts themselves. Source: Invesense Research.
Oil Spikes No Longer Break the US Stock Market
The old rule — “oil up, stocks down” — is no longer supported by the data. Since 2010, the correlation between WTI crude and the S&P 500 has been near-zero or slightly positive. Two structural shifts explain why:
US Net Crude Oil Imports (000s b/d) — Declining
Source: US DOE
US Crude Oil Exports (000s b/d) — Surging
Source: US DOE
America became a net oil exporter. Net imports collapsed from 12.5M b/d in 2005 to near zero today. When oil spikes, the US economy now benefits from higher producer revenues, energy employment, and an improved trade balance — offsetting the consumer impact.
Energy shrank from 13% to 3% of the S&P 500. Technology now represents over 55% of the index. Apple alone exceeds the entire Energy sector in market cap. Software, cloud, and AI companies have virtually zero oil input costs. A 10% move in oil shifts the index by just 0.3% today versus 1.5% in 2008.
S&P 500 Sector Composition: Then vs Now
Information Technology
Comm. Services + Cons. Disc.
Energy
Financials
| Sector | 1990 | 2008 | 2025 | Direction |
|---|---|---|---|---|
| Information Technology | 6% | 15% | 34% | ▲ ▲ ▲ |
| Comm. Services + Cons. Disc. | 22% | 12% | 21% | ▲ |
| Energy | 13% | 13% | 3% | ▼ ▼ ▼ |
| Financials | 8% | 13% | 13% | → |
Tech-adjacent total = ~55% (IT + Comm Services + Consumer Discretionary incl. Amazon, Tesla, Alphabet, Meta). Source: Invesense Research.
Where We Stand Today
The S&P 500 closed at 6,632 on March 13 — just 5% below its all-time high, despite the most significant Middle East military escalation since the Iraq War. For perspective, the April 2025 tariff shock produced a 15–19% drawdown that fully recovered within months. Our US large-cap portfolios had already pulled back meaningfully through the tariff-driven correction earlier in 2025 — and recovered. We view the current drawdown as comparable or smaller in magnitude, with the same structural tailwinds intact.
What we are watching: Strait of Hormuz shipping flows (currently disrupted but strategic reserves released), WTI sustained above $140 (currently ~$97 — well below that threshold), and any escalation that would permanently impair global energy supply chains. None of these conditions are met today.
Our View
This is not 1990. The S&P 500 is a technology index now — 55% tech-adjacent versus 28% in the Gulf War era. The US is a net oil exporter, not an importer. The old negative correlation between oil and equities is a relic of a different market structure. And in 19 of 20 post-WWII geopolitical events, the market recovered within weeks. The data does not support panic — it supports patience.
We remain fully invested across our strategies and continue to monitor risk factors closely. Long-term investors are rewarded for staying the course — and that remains our unwavering commitment.
Have questions about your portfolio?
Our investment team is available to discuss market developments and your investment outlook.
Invesense Asset Management Ltd. is regulated by the Dubai Financial Services Authority (DFSA). This publication is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results.
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