The S&P 500 is less than 2% away from new all-time highs, yet worries and concerns remain top of mind. Clearly, the impact of AI has worried many investors, with software and financial services all hit hard in the past few weeks, but one bigger worry now is, with the US attacking Iran.

Even amid the conflict (threats earlier) in the Middle East, the stock market has held up surprisingly well, but the real action has been in the oil markets, with crude oil recently up over $70/barrel.

By no means are we minimizing the potential of conflict in the Middle East and we hope whatever happens, it is resolved quickly within the scope of any objectives. Of course, just creating a credible threat earlier, may be part negotiating tactic. Now that the war has began, the bigger question is what will happen to markets? In the near term, some weakness and a spike in oil is likely, not to mention safe havens like gold and bonds finding a bid. But the bigger picture is a different question.

If you see the history during the biggest geopolitical events, a near-term volatility and potential weakness are common, but if you look long term, then the returns are more positive. At the end of the day, some of the poor returns took place during recessions.

But the bottom line is that geopolitical issues rarely become major investment issues if the economy is on a solid footing.