How to think about the Iran war — and what it means for oil and stocks

Investing in the Stock Market During the Iran Conflict

As the Iran war continues with no clear end in sight, investors may be wondering how to navigate the uncertainty. While it’s natural to have concerns about the impact of the conflict on the stock market, waiting for resolution may not be the best strategy.

Current Situation

Despite ongoing tensions, the effects of the conflict have been somewhat mitigated by various workarounds in the oil market. Countries like Saudi Arabia and Abu Dhabi have increased their oil exports through alternative routes, reducing the reliance on the Strait of Hormuz. Additionally, other energy producers are stepping up production to fill any supply gaps.

Impact on Prices

Concerns about potential tolls imposed by Iran for passage through the strait are valid, but the overall impact on oil prices is likely to be temporary. Any price spikes would incentivize more global production, leading to a stabilization of prices in the long run.

Inflation and Market Response

While there may be short-term inflationary pressures due to rising energy costs, the broader impact on inflation is expected to be minimal. The stock market has historically anticipated future trends and often rebounds before uncertainties are fully resolved.

Looking Ahead

Instead of waiting for clarity on the Iran conflict, investors should focus on the bigger picture and the long-term prospects of the stock market. Market volatility may continue, but history has shown that staying invested through turbulent times can yield positive results in the end.

Ken Fisher is the founder and executive chairman of Fisher Investments, a four-time New York Times bestselling author, and regular columnist in 21 countries globally.