The age-old investment adage of “buy when there’s cannon fire, and sell when the trumpets sound” appears particularly relevant given the escalating conflict between the United States, Israel, and Iran over the past ten days. The question for investors is whether to capitalize on market downturns triggered by geopolitical instability, anticipating a rebound when conditions improve. Determining the extent to which geopolitical events should influence investment decisions remains a key challenge for market participants.
Historically, investors have often been correct to disregard geopolitical “noise,” particularly over the course of the 20th century. But, this strategy has proven less effective during extreme events such as the World Wars or the oil shocks of the 1970s. The current situation, with heightened tensions and military action, is prompting a reassessment of this approach.
The rationale behind the “cannon fire” strategy is straightforward: armed conflicts typically lead to declines in financial asset values, creating potential buying opportunities. However, these periods similarly carry heightened risk, which can deter many investors. A recent study highlighted in the Global Investment Returns Yearbook 2026 suggests that those who have historically demonstrated the courage or conviction to invest during such times have often achieved superior returns. This underscores the potential rewards associated with a contrarian approach, though it also acknowledges the inherent uncertainties.
The current conflict, which began with U.S. And Israeli strikes on Iran on February 28, 2026, following weeks of military buildup and threats from President Trump, has already seen retaliatory missile launches by Iran targeting Israel, and U.S. Facilities across the Middle East, according to reports. Trump stated the operation aims to prevent Iran from developing nuclear weapons and to protect the American people. The situation remains fluid, and the potential for further escalation continues to weigh on global markets.
The strikes targeted sites in Tehran, Isfahan, Karaj, Kermanshah, Qum, and Tabriz, with Israeli officials confirming the death of Iranian Supreme Leader Ayatollah Ali Khamenei. The Global Investment Returns Yearbook 2026 study suggests that historically, investors who acted decisively during periods of geopolitical turmoil have often benefited from subsequent market recoveries.
