Peace Through Strength: How Markets Respond to Global Conflicts and Policy Shifts

June 23, 2025 | Season 7 | Episode 24 How do markets respond when geopolitical tensions escalate? Despite US airstrikes on Iranian nuclear facilities and ongoing Middle East conflict, investors displayed remarkable calm - demonstrating a pattern we"ve seen repeatedly where buying during military uncertainties has historically proven profitable. Markets showed minimal movement across global indices, with even traditional safe-haven assets seeing only modest shifts. This pattern highlights an evolving investor psychology: while humanitarian implications remain severe, contained regional conflicts rarely derail broader economic trends. As one analyst noted, the US strikes may even represent a reinforcement of deterrence capabilities through a "peace through strength" doctrine. Behind this surface calm lies significant volatility throughout 2024. While S&P returns rank in just the 24th percentile historically through June, volatility has reached the 89th percentile - creating that roller-coaster sensation without meaningful progress, particularly for mid-cap and small-cap investors still underwater for the year. Beyond immediate tensions, several crucial factors demand investor attention: Federal Reserve policy remains uncertain as Chairman Powell navigates what he calls "a very foggy time"; pandemic-era health insurance subsidies expiring in 2025 could dramatically impact early retirement planning; and traditional energy companies might unexpectedly benefit from AI"s massive power requirements. Perhaps most telling is the historical lesson that market dominance is temporary. From US Steel"s breakthrough as the first billion-dollar company in 1901 to Apple reaching trillion-dollar status in 2018, transformational companies eventually give way to new innovators. With AI representing the first self-improving technology in human history alongside demographic shifts toward aging populations, tomorrow"s market leaders likely emerge from industries we"re only beginning to understand. Join us as we navigate these complex crosscurrents and explore what history teaches us about investing amid uncertainty. Subscribe for more insights that help you make informed financial decisions in an increasingly unpredictable world. ** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice. For full disclosures, ADVs, and CRS Forms, please visit https://heroldlantern.com/disclosure ** To learn about becoming a Herold & Lantern Investments valued client, please visit https://heroldlantern.com/wealth-advisory-contact-form Follow and Like Us on Youtube, Facebook, Twitter, and LinkedIn | @HeroldLantern