Investing in Turbulent Times: What History Teaches About War, Crisis and the Stock Market
March 9, 2026
11 min read
War in Ukraine. Conflict in the Middle East. US-China tensions. Tariffs, sanctions, uncertainty everywhere. The headlines make it sound like the world is on the edge — and your portfolio right along with it.
It's completely normal to feel anxious in times like these. The question "Should I sell everything?" is deeply human. But it's almost always the wrong reaction. Because history shows — with remarkable clarity — that stock markets have survived every geopolitical crisis of the last 100 years. Every single one. Without exception.
This article gives you the data, the perspective, and the concrete strategies you need to not just survive turbulent times — but to benefit from them.
🎬 Video-Analysis
Contents
- What the Data Really Says
- Stock Markets and War: 100 Years in Numbers
- The Counterintuitive Truth: Markets Rise Despite War
- Why We React Wrong in Crises
- 3 Strategies for Turbulent Times
- Why Quality Companies Survive Crises
- Using the VIX as an Opportunity
- What World War II Teaches About Today's Markets
- Conclusion: The Tortoise Wins — Even in the Storm
- Frequently Asked Questions
What the Data Really Says
Before we talk about emotions, let's talk about facts. The numbers are unambiguous:
~5%
Average S&P 500 decline after geopolitical shocks
28 days
Average recovery time after geopolitical events
75%
Of cases where the S&P 500 was higher 12 months after crisis onset
An analysis by LPL Research examining 20 major military conflicts since World War II found that the S&P 500 declined an average of roughly 5% after the initial shock. Markets typically bottomed within three weeks and took an average of just one to two months to return to pre-crisis levels — regardless of how long the conflict itself lasted.
Hartford Funds confirms: across analysed armed conflicts since WWII, the S&P 500 was positive after 12 months in approximately 70% of cases, with an average return in the high single digits.
Chart 1: Don't Stop Investing — S&P 500 Since 1950 With All 15%+ Drawdowns
The market is always crashing by double digits. But the S&P 500 has returned 10% per year on average. Every single drawdown was a buying opportunity in hindsight.
Source: Personal Finance Club, S&P 500 Log Graph since 1950
The message is clear: wars and crises are terrible for humanity. But for the stock market — if you think in decades rather than days — they are temporary setbacks in a long-term uptrend.
Stock Markets and War: 100 Years in Numbers
The following table shows S&P 500 performance after the largest geopolitical shock events of the past 80+ years. The data comes from Carson Research and covers 48 individual events — from "Germany Invades France" (1940) to "US Removes Maduro in Venezuela" (2026):
Chart 2: S&P 500 Performance After 48 Geopolitical Shock Events (1940–2026)
Green numbers = positive return, red numbers = negative return. The majority of cells are green.
Source: Carson Investment Research, S&P Dow Jones Indices, CFRA, Strategas, 02/2026
The key findings from the data:
After 1 month: The market was positive in 46.5% of cases. The average decline was just -0.9%. The median was -0.2%. Initial panic is often short-lived.
After 3 months: Already 66.7% of cases showed positive returns. The average was +0.8%. Recovery typically sets in faster than most investors expect.
After 6 months: 61.9% positive, with an average of +3.4%.
After 12 months: 65% positive, with an average of +3.0%. And here's the crucial point: the three cases with the largest 12-month losses — Germany invading France (1940), Pearl Harbor (1941), Lehman Brothers (2008) — all coincided with a simultaneous recession. Without a recession, the market almost always recovers.
The Historical Lesson
Geopolitical crises alone are almost never enough to bring down the stock market long-term. What truly damages markets is a combination of geopolitical shock AND economic recession. As long as corporate earnings are growing and the economy holds, markets recover — often faster than expected.
The Counterintuitive Truth: Markets Rise Despite War
What surprises most investors: stock markets often rise during wars, not just after. The explanation lies in the forward-looking nature of markets — they price the future, not the present.
Chart 3: "Buy the Invasion" — Market Reactions to Five Major Wars
Vietnam (1964), Gulf War (1991), Afghanistan (2001), Iraq (2003), Crimea (2014) — in every case, the onset of war marked a trough, followed by a rally.
Source: Historical market data
Two particularly striking recent examples documented by Invesco:
MSCI Poland Index since Russia's invasion of Ukraine: Since February 24, 2022, the Polish stock market rose 155% — that's 26.3% per year. The country next door to the war zone delivered one of the world's best stock market performances.
MSCI Israel Index since the Hamas attack: Since October 7, 2023, the Israeli stock market rose 113% — 37.1% per year. A country in active conflict, whose stock market ranked among the top performers globally.
These are not outcomes anyone would have predicted in the early days of those conflicts. But they confirm the pattern: markets respond to economic fundamentals, corporate earnings, and monetary policy — not to headlines.
Invesco's Conclusion
"Geopolitical conflicts, while unnerving, shouldn't change investors' long-term investment plans. History shows that other factors — economic growth, business innovation, and monetary policy — drive the path of the markets." And when central banks are cutting rates (as the Fed did recently in 2025), that's an additional tailwind for equities.
Why We React Wrong in Crises
If the data is so clear, why do so many investors panic-sell anyway? The answer lies not in logic but in psychology.
Loss Aversion: The pain of a loss weighs roughly twice as much psychologically as the joy of an equal-sized gain. When your portfolio drops CHF 10,000, it feels twice as bad as the happiness you felt when it gained CHF 10,000. This isn't weakness — it's human neurobiology.
Availability Bias: Dramatic news (war, crash, panic) is more emotionally present than the quiet, boring months when the market steadily rises. You remember the COVID crash of March 2020. You don't remember the 47 months after, during which the S&P 500 more than doubled.
Action Bias: In crisis times, "doing nothing" feels wrong. We feel compelled to act — sell, reallocate, hedge. But the data shows: the best action is almost always no action.
Missing the Best Days Costs a Fortune
A Visual Capitalist analysis of the S&P 500 (2003–2022) shows: $10,000 fully invested grew to $64,844. Missing just the 10 best trading days — seven of which occurred during bear markets like 2008 and 2020 — would have left you with just $29,708. That's a 54% reduction in returns, simply from not being invested at the wrong moment. The best days almost always come directly after the worst ones. If you sell, you miss both.
More on the psychology of investing in our article Master Your Emotions When Investing and our Book Club summaries of The Psychology of Money and Thinking Fast and Slow.
Every Friday, we put the markets in context. arvy's Weekly analyses one quality stock per week — with charts, fundamentals and perspective. Especially in turbulent times, knowledge beats panic. → Subscribe for free (12,000+ readers)
3 Strategies for Turbulent Times
We've written extensively about arvy's three core principles for navigating volatility. Here's the summary — and why each principle is especially relevant right now:
Strategy 1: Know What You Own — And Why
Peter Lynch said: "Know what you own and why you own it." If you can't explain in 30 seconds why a company is in your portfolio, you shouldn't own it — especially not in a crisis.
At arvy, investors can explore every company in the portfolio through the app — with full transparency and clear explanations. When you know that Ferrari produces only 14,000 cars per year, has a waiting list measured in years, and operates at a 23% net margin, you also know: a tariff dispute between the US and China changes none of that. Demand for Ferrari exceeds supply — in every market phase.
This understanding is your shield against panic. Those who know what they own don't sell in fear.
Strategy 2: Lump Sum + Savings Plan (Dollar-Cost Averaging)
The holy grail of investing is simple: invest a lump sum, then add a fixed amount every month via standing order. In good times, your capital participates. In bad times, you buy at lower prices.
The critical part: keep the savings plan running — especially during crises. Charlie Munger said: "The first rule of compounding: Never interrupt it unnecessarily." Those who panic-sell and miss the best recovery days pay an enormous price.
Warren Buffett puts it simply: "Do not save what is left after spending — spend what is left after saving." On the 25th of each month — right when salary arrives — the money flows straight to the investment account via standing order. Before bills, before shopping, before everything else. That's how you pay your future self first.
Strategy 3: Larger Lump Sums During Sharp Drawdowns
Every 5–7 years, the S&P 500 drops by 20–30% or more. These are the moments when long-term investors build their wealth — not despite the crisis, but because of it.
In practice: when the market is 10% below its peak, increase your savings plan or invest an additional lump sum. At a 20% drawdown: invest more. At 30%: even more. Not all at once — staggered, disciplined, without emotion.
The Pattern of History
After every major war — Vietnam, Gulf War, Afghanistan, Iraq, Crimea — the market was higher 12 months after the conflict began in the majority of cases. The pattern doesn't mean "wars are good for markets." It means: markets recover because companies adapt, innovate, and grow — despite everything. And the investors who stayed invested during the panic benefit most from the recovery.
How all of this works in detail — including concrete chart examples with the arvy portfolio — is covered in our article How to Handle Stock Market Volatility: arvy's 3 Core Principles.
Why Quality Companies Survive Crises
Not all stocks are equal. In crisis times, the wheat separates from the chaff — and this is precisely where the advantage of quality investing shows.
Quality companies are characterised by strong cash flows, low debt, dominant market positions, and pricing power. They can not only survive crises but emerge stronger — because weaker competitors give up while the strong gain market share.
Some examples from the arvy portfolio:
Visa: Earns from every card transaction worldwide. As long as people pay — in good times and bad — Visa earns. The business model is crisis-resistant because it's tied to transaction volume, not to economic growth alone. During the COVID crisis of 2020, Visa's stock fully recovered within 5 months.
Microsoft: Cloud computing, enterprise software, and AI aren't optional — they're infrastructure. Companies don't cancel their Azure contracts in a crisis. That makes Microsoft a "must-have," not a "nice-to-have." Revenue actually grew during the COVID pandemic as companies accelerated their digitalisation.
arvy's Philosophy: Skin in the Game
We invest in companies that may seem "boring" in the short term — but through their consistency, outperform most market participants over the long run. And the arvy founders invest over CHF 100,000 of their own money in the same portfolio. Same fees, same returns, same risk. If we stay invested through corrections, so can you. → Skin in the Game: Why We Invest Ourselves
Using the VIX as an Opportunity: When Fear Is Greatest
The VIX — also known as the "fear gauge" — measures the expected volatility of the S&P 500 over the next 30 days. When the VIX is high, fear is high. And that's precisely when the best buying opportunities arise.
The logic: a high VIX means the majority of market participants are in panic. Prices have already fallen sharply. The bad news is priced in. And historically, VIX spikes are followed by above-average recovery periods.
An Invesco analysis of the Geopolitical Risk Index shows: across 11 historical instances where the index peaked, the S&P 500 was significantly higher in the following year in the majority of cases. The conclusion: peak fear is almost always a better buying point than peak euphoria.
This doesn't mean blindly buying into falling markets. It means: if you have a savings plan that invests automatically every month, you buy more shares at lower prices during fear phases. The standing order is your best friend when the VIX explodes — it invests without emotion, automatically and with discipline, precisely at the moments when you couldn't bring yourself to do it manually.
What World War II Teaches About Today's Markets
If there is one ultimate stress test for stock markets, it's the Second World War. The world stood at the abyss — and the stock market?
Chart 4: S&P 500 Performance 1940–1945
Despite years of war to come, the market bottomed in mid-1942 — and rose continuously from that point on.
Source: Historical S&P 500 data
The S&P 500 hit its bottom in June 1942 — in the middle of the war, when the outcome was still completely uncertain. From that point, it rose steadily while the war raged on for another three years. The stock market didn't "wait for the war to end." It anticipated the recovery long before the last shot was fired.
The lesson for today: if the market survived the Second World War — and found its bottom during the war, not after — it will survive today's geopolitical tensions too. The question isn't whether, but when — and whether you're invested at that moment.
Chart 5: S&P 500 and All Wars Since 1928 — The Big Picture
Every marked point is a war or conflict. The line goes up regardless — for over 100 years, without exception.
Source: First Trust, S&P CapIQ, Bloomberg. Monthly index levels 12/1927–2/2022
Conclusion: The Tortoise Wins — Even in the Storm
Let's summarise what 100 years of stock market history teaches us:
Geopolitical crises are temporary. Long-term economic growth is not. Since 1928, the S&P 500 has survived two world wars, the Cold War, Vietnam, the Gulf War, 9/11, the financial crisis, COVID, and the Ukraine war. Every time, the market recovered. Every single time.
Panic selling is the most expensive decision you can make. Missing the 10 best trading days over 20 years cuts your returns in half. And the best days almost always come during or immediately after the worst ones.
Quality companies survive crises — and benefit from them. Nestlé, Visa, Microsoft — they sell products people need in every market phase. A portfolio of such companies gives you the confidence to stay invested even at -20%.
The savings plan is your strongest ally. Automated investing via standing order removes emotion from the equation. You buy in good times, you buy in bad times — and over 20 years, you build wealth that doesn't fear crises.
"The stock market is a device for transferring money from the impatient to the patient." — Warren Buffett
The world will always have crises. There will always be wars, political tensions, economic uncertainty. The question isn't whether the next crisis is coming — it's whether you're prepared. With a clear plan, a portfolio of quality companies, and the discipline to stay invested, you are.
Frequently Asked Questions: Investing in Times of Crisis
Should I sell my stocks when a war breaks out?
No. Historically, the S&P 500 was higher 12 months after crisis onset in 70% of cases. The average decline after geopolitical shocks is only around 5%, and recovery typically occurs within 1–2 months. Panic selling realises losses and prevents you from benefiting from the recovery.
How does the stock market react to geopolitical crises?
Short-term, prices fall — on average by 5–6%. But recovery kicks in quickly: in 19 of 20 analysed conflicts since WWII, the market returned to pre-crisis levels within an average of 28 days. Long-term, corporate earnings, innovation, and monetary policy determine market direction — not geopolitical headlines.
What is the best strategy during uncertain times?
Stay invested and keep your savings plan running. Dollar-cost averaging (DCA) is especially powerful in crisis times because you automatically buy more shares at lower prices. Supplement with additional lump sums during sharp drawdowns (10–30% below peak). And invest in quality companies you understand — "Know what you own and why you own it."
Are we currently in a bear market?
A bear market technically begins at a 20% or greater decline from the peak. Such phases occur on average every 7 years. The good news: over the past 200 years, the market has recovered from every bear market — without exception. The question isn't whether the market will recover, but whether you'll be invested when it does.
How can I start investing during a crisis as a beginner?
Start with a small, regular amount — with arvy from CHF 1/month. Set up a standing order that invests automatically after payday. Read arvy's Weekly to understand the companies in the portfolio. And remember: precisely because prices are lower right now, you're buying cheaper than in boom times. The best time to invest was yesterday. The second best is today.
In turbulent times: stay invested
An arvy savings plan invests automatically — no matter what the headlines say. Quality companies, FINMA-regulated, founders who invest alongside you. From CHF 1/month.
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This article was written by Thierry Borgeat, CFA & Co-Founder, and reviewed by Florian Jauch, CFA. Last updated March 2026. All historical data is based on publicly available sources: Carson Investment Research, First Trust, RBC Wealth Management, LPL Research, Hartford Funds, Visual Capitalist, Invesco, IMF Global Financial Stability Report. Past performance is no guarantee of future results.
Disclaimer: This article is for general information purposes only and does not constitute personal investment advice. arvy is a wealth manager supervised by FINMA with a CISA license. Imprint & Legal Notice
