Two Key Takeaways

• Geopolitical events grab headlines, but earnings and interest rates ultimately drive long-term stock prices. History shows that investors who sell during geopolitical crises often miss powerful recoveries.
• Timing both the exit and the re-entry is extraordinarily difficult. The biggest risk isn’t enduring temporary market declines—it’s missing the recovery that often begins while the news is still overwhelmingly negative.

OPENING

Good evening, everyone and happy 4^th of July weekend and our great nations 250 year B-day. I wanted to follow up on a topic that came up during our 2h26 market outlook livestream last week and address one of the questions we hear most often from retirees, that is:

“Should I sell because of what’s happening in the world?”

Russia. Ukraine.Iran.Israel.China.Taiwan.

The headlines are frightening. Markets become volatile short term.

And the temptation many retirees have is to “wait until things settle down” to invest or fight the urge to “go to cash” and try to market time.

But tonight, I want to ask you one simple question. Are you really that good at market timing? Do you have a history of successfully executing this strategy?

Because timing the market isn’t making one correct decision. It’s making two.

You have to know when to sell…and you have to know when to buy back.

History says that’s much harder than most people believe. All we have to

is look at two recent examples the last few years.

EXAMPLE #1

RUSSIA INVADES UKRAINE

On February 24, 2022, Russia invaded Ukraine.

Markets immediately feared:

• A European recession
• An energy crisis
• Runaway inflation
• Higher interest rates
• A global economic slowdown

Many investors concluded that stocks had nowhere to go but lower. Initially, they weren’t entirely wrong. Over the next eight months, the S&P 500 declined 18.4%.

But here’s the important point. The war wasn’t the primary reason stocks fell.

The larger drivers were:

• A Federal Reserve raising interest rates at the fastest pace in decades.
• An earnings recession, as corporate profits temporarily declined vs. tough post Covid reopening comps.

Those fundamental factors—not the geopolitical headlines—ultimately determined market direction.

Now fast-forward to today. Russia is losing the war and few in the media are focusing on the conflict anymore. And Since that invasion began:

• S&P 500 Price Return: +73.3%
• Total Return with Dividends reinvested: +84.2%
• Annualized Return: approximately 15.5% with dividends reinvested

Think about that. The news from Ukraine has remained tragic.

Yet investors who stayed invested have been rewarded with outstanding long-term returns.

The headlines stayed negative. The market eventually looked forward.

EXAMPLE #2

THE IRAN–ISRAEL CONFLICT

Now let’s look at a much more recent example. Earlier this year, tensions between Iran and Israel escalated dramatically. Financial television quickly filled with predictions of:

• Higher oil prices
• Persistent inflation
• Global recession
• Another bear market

Markets did become more volatile. The S&P 500 briefly corrected to down almost -10%.

Many investors once again considered moving to cash. Today?

The S&P 500 remains approximately 10% higher than where it began during that period.

Once again, markets proved an important lesson. Shorter term investors and traders initially price uncertainty. But over time…they return to pricing earnings.

And corporate earnings have continued moving higher throughout 2026. Significantly higher in fact.

THE LESSON

Headlines Move Markets over shorter term periods, however Earnings Drive Markets over longer time periods.

That’s a huge difference. Geopolitical events can absolutely create:

• Volatility
• Fear
• Short-term uncertainty

But history shows, time and time again, that markets eventually refocus on 2 questions:

• Are companies growing earnings?
• Are interest rates supportive?

Those fundamentals determine where stocks go over years—not days.

THE MARKET TIMING PROBLEM

Let’s assume someone sold after Russia invaded Ukraine.

When exactly were they supposed to buy back? After inflation peaked?

After oil prices fell? After the Fed stopped hiking? After the economy recovered?

After earnings improved? By the time many investors finally felt comfortable…

the market had already recovered. That’s the challenge.

Market bottoms rarely occur when the news becomes good. They usually occur while the news is still terrible. Often 6 months before the economy turns, look back at the GFC or the Covid closures.

The same challenge exists today. If someone sells because of geopolitical fears…

what event tells them it’s finally safe to buy again? History suggests there usually isn’t one.

WHAT HISTORY TEACHES

Event	Initial Reaction	Long-Term Outcome
Russia–Ukraine	-18.4% decline	+84.2% total return
Iran–Israel	Brief correction	Market remains about +10%

The lesson isn’t that markets ignore wars. They don’t.

The lesson is that markets eventually price something else.

Future earnings. Future cash flows. Future economic growth.

CLOSING

So let me leave you with one final thought.

Every geopolitical crisis feels different while you’re living through it.

Every headline feels urgent. Every correction feels permanent.

But history reminds us that investors are generally rewarded for patience, not emotions.

Can someone successfully time the market around geopolitical events? Certainly.

Someone always does. The better question is:

Can they do it consistently? Or better yet, can you do it consistently?

History says very few can. That’s why our investment philosophy remains unchanged.

Stay disciplined. Stay diversified. Stay focused on your financial plan with your advisor while our investment team stays focused on earnings and long-term fundamentals, not simply the headlines of the day. Because when it comes to market timing…

the question every investor should ask is: “Am I really that good?” I’m Chris Perras.

Thank you for watching, and I’ll see you next week.

Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect