When markets get loud, discipline gets rewarded

If you’ve checked your portfolio lately and felt a twinge of unease, you’re not alone. The past six weeks have delivered the kind of market environment that tests every investor’s conviction — sharp swings in equity indexes, oil prices surging past $100 a barrel, a geopolitical conflict reshaping global energy markets, and a Federal Reserve navigating an uncertain economic backdrop.

But here’s what decades of market history tell us: the investors who come out ahead are rarely the ones who reacted fastest. They’re the ones who stayed clearest.

What’s actually happening in the markets right now

Since late February, when U.S. and Israeli military operations against Iran began and Iran subsequently closed the Strait of Hormuz — a waterway through which approximately 20% of the world’s daily liquid petroleum travels — global markets have been navigating what may be the largest energy supply disruption in modern history.

The effects have rippled across nearly every asset class. Brent crude, which began the conflict period near $70 per barrel, surged past $100 and has remained volatile. U.S. gasoline prices crossed $4 per gallon in early April. The CBOE Volatility Index (VIX) — Wall Street’s widely-watched “fear gauge” — spiked to an intraday high of 31.65 on March 27th before retreating as a conditional ceasefire was announced in early April.

The week of April 7th saw a dramatic recovery. After President Trump suspended military operations for a two-week ceasefire, the Dow Jones Industrial Average surged more than 1,325 points — its best single day since April 2025. The S&P 500 posted its best weekly performance since November, gaining 3.6%. The Nasdaq climbed 4.7% for the week.

As of this writing, however, talks have broken down. Ceasefire negotiations collapsed over the weekend, the U.S. announced a blockade of the Strait of Hormuz, and the market opened Monday with fresh volatility before recovering again by close — with the S&P 500 ending Monday at 6,886, its highest close since before the conflict began.

The economic backdrop: more complexity beneath the surface

Geopolitics isn’t the only variable investors are tracking. The macroeconomic picture adds its own layers of nuance heading into spring 2026.

March’s Consumer Price Index came in with headline inflation rising 0.9% month-over-month — roughly in line with estimates — while core CPI (which strips out food and energy) came in at a softer 0.2%. That’s a partial relief, but energy price pressures from the Strait disruption make the forward inflation picture genuinely uncertain.

Consumer sentiment, meanwhile, hit an all-time low reading on the University of Michigan index. Final Q4 2025 GDP was revised down to just +0.5% annualized growth. Durable goods orders have declined for three consecutive months. These aren’t recession signals in isolation, but taken together, they describe an economy that is clearly slowing — and one that the Federal Reserve is watching very carefully ahead of a leadership transition in the coming weeks.

Earnings season, which kicked off this week, adds another dimension. Goldman Sachs reported record revenues driven in part by elevated trading activity during the volatile period. JPMorgan Chase and Wells Fargo reported this week as well. Strong bank earnings during volatile periods are not unusual — but they don’t necessarily signal smooth waters ahead for the broader economy.

What history tells us about moments like this

It’s easy — and understandable — to feel that this moment is uniquely dangerous. But markets have faced geopolitical shocks, energy crises, and economic uncertainty many times before, and the pattern that emerges from the data is surprisingly consistent.

According to research from UBS, when the S&P 500 drops 5–10% within a three-to-four week window due to geopolitical conflict, the index has historically been above its pre-conflict level just six months later. Analysts at Fundstrat have pointed to World War II as a reference case: the stock market bottomed in May 1942, just months after the U.S. entered the war — before the major military campaigns had even begun in earnest.

The VIX data tells a similar story. According to Creative Planning’s Chief Market Strategist Charlie Bilello, the S&P 500’s highest decile of VIX readings — above 28.3 — has historically been followed by an average forward total return of 22% over the next 12 months. That’s nearly double the market’s long-run average. Fear, historically, has been a better buying signal than most investors realize.

This doesn’t mean ignoring risk. It means understanding that volatility and risk are not the same thing — and that reaction, not the market itself, is often what damages long-term portfolios.

What disciplined investors do differently

At Wittenberg Investments, we’ve been through enough market cycles to recognize the pattern: uncertainty spikes, headlines become overwhelming, and the instinct to do something — anything — feels urgent. That instinct is natural. But it’s also where wealth quietly erodes.

Behavioral finance research has long documented the gap between market returns and actual investor returns. DALBAR’s studies consistently find that investors underperform the benchmarks they’re invested in by 1–3% per year — not because of bad funds, but because of poorly-timed decisions made in moments exactly like this one.

What we counsel our clients to do instead:

Review, don’t react. Volatility is a prompt to revisit your plan, not abandon it. Ask whether your allocation still reflects your goals, timeline, and actual risk tolerance — not the risk tolerance you thought you had when markets were calm.

Rebalance thoughtfully. If your portfolio has drifted — say, energy stocks now represent a larger share due to oil price movements — systematic rebalancing back to your target can both manage risk and capture opportunity without requiring market prediction.

Zoom out on your timeline. If you’re five, ten, or twenty years from retirement, the Strait of Hormuz situation — as serious as it is — will very likely be a footnote in the long arc of your financial life. The question is not whether markets will recover, but whether your plan is robust enough for the journey.

Keep fees and costs in focus. In uncertain markets, the costs you can control — adviser fees, fund expense ratios, unnecessary trading — matter more than ever. As a fee-only, independent RIA, we’re structured around your interests, not transaction volume.

A final thought

The clients who feel most secure right now aren’t necessarily the ones with the most market information. They’re the ones with the clearest plan — one that was designed for moments like this, not just for the easy quarters.

If the current environment has left you with questions about your portfolio, your retirement timeline, or how your assets are positioned for what comes next, that conversation is exactly what we’re here for.

Wealth, built with discipline.