War has returned to the headlines, and understandably it has unsettled many people. On Saturday 28 February, the US and Israel launched air strikes on Iran, resulting in the death of Ayatollah Ali Khamenei, who had led the country for nearly 40 years.
It is a significant moment in Middle Eastern politics, and the situation is still evolving. When events like this happen, markets react quickly.
People don’t like uncertainty, and when fear rises, the instinctive response is to move away from risk.
Making a knee jerk decision could be something you regret
We’ve seen the usual pattern: investors selling equities and seeking shelter in government bonds, gold, and the US dollar. While the headlines change, human behaviour rarely does — and neither does the long-term nature of markets.
Over decades, markets have absorbed wars, crises, political shocks, and everything in between. Despite all of it, long-term investors have been rewarded for staying the course.
It’s never pleasant to see your portfolio fall in value, and it’s perfectly natural to feel the urge to “do something”. But history shows that reacting emotionally in moments like this often causes more harm than good.
Staying focused on your long-term goals remains the most reliable path through uncertainty.
We are not making sudden changes, which is deliberate
By the time a crisis hits the headlines, markets have already moved. The right time to prepare is before the shock, not during it, and that’s exactly what we’ve been doing for some time.
Our portfolios have been positioned cautiously, with a focus on balancing risk and opportunity. A few key elements of that positioning include:
- diversification across regions and asset classes, reducing reliance on any single market or outcome
- a blend of active and passive funds, with active managers typically falling less than the wider market during sharp selloffs
- inflation resilient assets, such as index linked bonds, infrastructure, and commercial property
- short dated bonds, which help manage volatility when inflation expectations shift
- increased exposure to government bonds, providing a defensive anchor during market stress
- meaningful UK equity exposure, including major energy companies that may benefit from higher oil prices
- a measured currency hedge, reflecting our long-term view on the US dollar.
This is not a portfolio built for one scenario, it’s built to withstand many. That’s the essence of long-term investing.
No one knows how long this conflict will last, or how it will evolve
Prolonged disruption could affect oil supply routes such as the Strait of Hormuz, which in turn could influence inflation. These are real risks, and we are watching them closely.
It’s important to remember that markets are forward looking. As uncertainty begins to ease, and it always does, eventually, markets tend to stabilise long before the news flow becomes calmer.
That’s why trying to time an exit and then a re-entry is so dangerous. You have to get two decisions right, and missing even a handful of the market’s best recovery days can set back long-term returns significantly.
Our job is to stay calm, stay disciplined, and stay focused on the long term. Your portfolios are built with resilience in mind, and we believe they are well positioned to navigate this period of volatility.
As the situation develops and more clarity emerges, we will reassess and adjust where appropriate. For now, the most valuable action is often the hardest one: staying invested and keeping perspective.
4 March 2026