I’m going to take a short break from our theme for the year—the 2026 Retirement Challenge—because I want to address a concern I’m hearing from many people right now: the fear about war and how it might impact their investments.

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470- War and Stock Market Volatility

Announcer: Welcome back America to Sound Retirement Radio, where we bring you concepts, ideas, and strategies designed to help you achieve clarity, confidence, and freedom as you prepare for and transition through retirement. And now here is your host, Jason Parker,

Jason Parker: America. Welcome back to another round of Sound Retirement Radio.

You’re listening to episode number. 470 and the title is War and Stock Market Volatility. I’m gonna take a short break from our theme for the year, which is the 2026 Retirement Challenge, because I wanna address a concern that I’m hearing from many people right now, and that’s the fear about war and how it might impact their investments, how it might impact their life, how it might impact their retirement.

So before we get into this episode, let’s start out by renewing our mind, this verse from Joshua. Have I not commanded you? Be strong and courageous. Do not be afraid. Do not be discouraged for the Lord. Your God will be with you wherever you go. And then something fun, something to put a smile on your face when it feels like things are heavy.

But, uh, how excited was the gardener about spring? So excited that he wet his plants. My team always asks me as I’m coming in to record the podcast, what the joke is for the day. And uh, I told ’em it’s all about delivery. You know, you gotta have a, you gotta have a strong, stupid. Anyways. Let’s start with a quick look at the markets as I write this.

It’s May 11th, 2026, and I’m, I’m gonna include in the show notes all of the market data and the indexes we used. But remember, index performance does not reflect fees or expenses and cannot be invested in directly. As always, past performance is no guarantee of future results. Year to date, the s and p 500 is down about 1.4%.

But if we zoom out just a little bit, over the trailing 12 months, the s and p 500 is still up 21%. Emerging markets are up about 2%. Year to date. The trailing one year, they’re up 23%. International developed markets are up 4.64% year to date, and the trailing one year, they’re positive about 29% and US 10 year treasuries.

Year to date, they’re up about 1% and the trailing one year, they were up about 5.2%. Now, the reason that I bring this up, because if you listen to the news today, you might think the world is falling apart, that the stock market is falling apart. Markets don’t just react to headlines. They reflect the broader economic engine of businesses around the world.

And if you’ve been investing for any length of time, you know that uncertainty is always with us. As I think back about the last 20 years, I can’t remember a single time when there wasn’t some reason to worry about what was happening either in our country or around the world, or both. There’s always gonna be a reason to be fearful about the future, and when it comes to investing, fear is one of the most powerful forces working against us.

One thing that helps me think about the future is to look at what has happened in the past. Recently Ivantis sent out a research report looking at how the US stock market performed following major geopolitical conflicts. They looked at the stock market performance over three months, one year, and three years after a major global event.

Here’s some of the events that they included in their analysis, Pearl Harbor and the US entering World War ii. The Korean War, the Cuban Missile Crisis, the Vietnam War, the 1973 Oil embargo. The Iran Iraq War, the Gulf War, the September 11th attacks, the Iraq war, uh, Russia’s invasion of Ukraine. Hamas attacking Israel, 16 major geopolitical conflicts in total.

And here’s what they found. Three months after these events, stocks were negative five times out of those 16 events. One year later, stocks were also negative. Five times out of those 16 events, three years later, there were zero instances where US stocks were negative, not one. Historically, markets have often recovered within several years.

Vanguard also provided me with some of their research on geopolitical selloffs. They looked at the 1962 Cuban Missile Crisis, 1974, president Nixon impeachment Proceedings, 1979 Iranian Hostage Crisis, 1979. Soviet Invasion of Afghanistan, 2003 Iraq War, the 2011 Arab Spring 2016 Brexit vote. The 2022 Russian invasion of Ukraine.

In all of these events, there was an initial sell off ranging from being down negative 3% to 5% negative. But they reported that the average total return six months from the event was positive 5%, and the average total return one year from the event was 8%. Now that’s an average. There was an outlier in 1974 after the Nixon impeachment proceedings.

The markets were down 4% initially, and then 11% at the six month mark. And then at the one year later, they were still down 16%. So recoveries don’t always happen immediately, and the past is no guarantee of what’s gonna happen in the future. But the takeaway is that based on history, volatility around war, around geopolitical events is really normal.

And so are the recoveries that follow. Volatility is normal. Negative is normal. Declines are normal part of investing. But over time, the economic engine of business continues to move forward because businesses exist to serve people, and it’s hard for me to imagine a world where businesses suddenly stop operating.

’cause it’s hard to imagine a world where people stop wanting a better life. As long as people continue striving for progress, innovation and improvement, the businesses that serve them will continue to grow and adapt. And investors who stay disciplined tend to benefit from that progress over time. So what do we do with this information when the world feels uncertain?

The question investors always ask is, what should I do now? So let me start with what we should not do. Number one, we do not try to time the market. Trying to guess when to get in and when to get out is a losing battle. It’s letting fear drive your investment strategy and fear is not a disciplined approach to investing.

Number two, we don’t try to chase what seems obvious during times of conflict. People often wanna buy things that they think are gonna benefit from war, so they say, I wanna load up on defense companies, or oil or commodities. But by the time those ideas feel obvious, those investments are often already at or near their highs.

Investing works best when we buy low and sell high, not the other way around, and I’m gonna tell you how to do that here in just a minute. Number three, we don’t make emotional decisions when it comes to money. When people start talking about moving everything into cash or putting large portions of their portfolio into gold, what they’re really doing is responding to fear.

They begin to believe a story that says, this time it’s different. But if you start down that path, it becomes very hard to come back because once you start looking for reasons not to invest, you’re quickly gonna discover that there’s never a perfect time to invest. Like I said in my last 20 years, it’s always volatile.

I. There’s always a reason to be afraid. So here’s what we should do instead. Number one, we need to have a plan. Look at your financial plan. Understand how volatility affects your plan in both the short term and the long term. Build your plan using conservative assumptions so that strong returns are helpful, but they’re not required for success.

Use tools like Monte Carlo analysis to run a thousand futures, a thousand iterations of how things could turn out, and then look at the more pessimistic view of the future and look at the more optimistic view of the future. And so you have an idea of the range of outcomes that you could experience.

Number two, I want you to be an investor, not a gambler, not a speculator. If there’s a right way to invest, when would you wanna know about it and when would you want to implement it? The right approach is diversification with a long-term perspective. If you retire at 60, there’s a good chance that you’re gonna live to 90, and I’d say 30 years is a long-term perspective.

Try to imagine, try to think where we’re gonna be 10 years from now. Not 10 days from now. When you diversify, you wanna diversify across asset classes, sectors, countries. You wanna be diversified across the entire global economy. You wanna use low cost funds that you can create an asset allocation that includes US stocks, international stocks, emerging stocks, high quality, fixed income.

You wanna own large cap, mid cap, small cap growth value you can tilt towards. The factors that research has shown may provide higher expected returns over time, and it’s actually possible. To own a lot of investments and still not be diversified. I call that diversification, not diversification.

Diversification. Many people own several mutual funds or ETFs, but when you look under the hood, they all own the same companies. More funds doesn’t mean more diversification. What matters is owning the right mix of investments combined intentionally like a recipe, so that the portfolio works together to deliver the results that we need with the least amount of risk.

Number three, we diversify across time. Money you need in the short term should be low risk and not exposed to market risk. For example, if you maintain three to five years of withdrawals, portfolio withdrawals for retirement in cash or money markets, short term market volatility becomes way less stressful.

You’re not worried about it because you know that the money you’re taking for income is coming from accounts that have no risk associated with them. History shows that markets have typically recovered within three to five years. Time is the cure to the volatility of the stock market. And the more time you have, the more risk you can take.

Now, many of you listening have overs saved for retirement. You may never spend all the money that you’ve accumulated in those situations. You may choose to not use a bucket strategy because you’re comfortable with the market fluctuations because you know that you’ve over saved. And I think that’s one of the things that a really good plan helps you identify.

And that’s okay. Remember this. Volatility is normal. If there were no risk, there would be no reward. The people who ultimately earn the reward are the ones who are willing to stick with the risk when it actually feels risky, like right now. Number four, you wanna rebalance. Rebalancing is one of the most powerful disciplines in investing.

It’s also one of the most uncomfortable because rebalancing forces us to do what we don’t want to do. It forces us to sell what’s done well, to buy what’s done poorly. For example, if we rebalance today, we might be selling some bonds to buy more stocks. Who wants to buy stocks? When the headlines feel scary, nobody.

But markets tend to move in cycles. There’s a regression toward the mean. It’s almost like a sense of gravity in the stock market. No asset class outperforms forever. Rebalancing helps us manage risk by keeping your portfolio aligned with your long-term strategy, it feels counterintuitive. That’s why it works.

And the last thing is to protect your mind and it, this may be the hardest step of all. Everything else we’ve discussed is mechanical. We can use data and spreadsheets and software to improve our understanding, but protecting and renewing our mind is difficult and it’s personal. Today we live in this world of constant negative information, 24 hour news cycles, social media, endless commentary, designed to keep us anxious.

Sometimes the most disciplined thing we can do is simply turn something off. Now, I normally don’t have social media on my phone. I deleted it years ago ’cause I, I didn’t like what it was showing me, and I could feel that my attitude, my outlook changing the more time I spent on it. But recently someone told me about Facebook Marketplace as a way to sell a few things instead of hauling them to the dump.

So I reinstalled Facebook on my phone that night. I ended up watching short form videos for like two hours. At one point I found myself fighting back tears, watching a clip from America’s Got Talent. And a few minutes later I was laughing out loud at funny dog videos and kids doing silly things. In that moment, I thought to myself, wow, this app just completely manipulated my emotions within minutes.

It took me from feeling really low to feeling really high. I don’t like that something has the power to impact me that way. I don’t think our brains were designed to swing from emotional lows to highs that quickly. Maybe I notice it more because I’m not on there all the time, but I can tell you the emotions were real and it felt like the platform was teaching me how to think and how to respond, how to react in a very specific way.

It’s important to keep the right perspective when it comes to world events. Remember, a lot of this stuff is, it’s happened in the past. Spring Follows Winter Morning follows Night, storms Pass, and the sunshine returns for those of us with faith, we also remember that we’re not alone in this world. And we stand on God’s promise that his plans are good even when we cannot see the outcome yet.

So what do we do at Parker Financial? We create a plan and view stock market volatility through the lens of understanding the specific impact that it’s having on you, not the world on you. Next, we encourage you to pay attention to the performance of your investments, not just the s and p 500 or whatever the financial media happens to be talking about this week.

What matters is how your entire strategy is performing. How are the US markets developed? International markets, emerging markets, high quality, fixed income, all working together, and how does tilting towards the drivers of higher expected returns contribute to the outcomes that you’re experiencing?

Investing isn’t about watching one piece of the puzzle, it’s about understanding how all the pieces fit together. So we stay disciplined, we stay rational, we stay focused on the long-term. We understand that short-term volatility is the price that we pay for long-term growth. We don’t run from it. We prepare for it, and we invest through it because the way that we win in the long run is by overcoming short-term fear.

I’m gonna end today the same way that we began. Here’s what God says. Have I not commanded you? Be strong and courageous. Do not be afraid. Do not be discouraged for the Lord. Your God will be with you wherever you go. Listen, as believers, at the end of the day, we know how this all ends. And it’s something to be hopeful for.

It’s something to look forward to, a new heaven and a new Earth, and I’m excited about that and I hope you are too.

Announcer: Thank you for tuning in to Sound Retirement Radio. For articles, links, and resources from today’s show, visit sound retirement planning.com. If you enjoy the podcast, share it with a friend and give us a friend.

Five star review. Ready to kickstart your retirement planning. Head over to retirement budget calculator.com. Need assistance with investment management. Explore our services@parkerfinancial.net. Information and opinions expressed here. Are believed to be accurate and complete for general information only, and should not be construed as specific tax, legal, or financial advice for any individual and does not constitute a solicitation for any securities or insurance products.

Please consult with your financial professional before taking action on anything discussed in this program. Parker Financial, its representatives or its affiliates have no liability for investment decisions or other actions taken or made by you based on the information provided in this program. All insurance related discussions are subject to the claims paying ability of the company.

Investing involves risk. Jason Parker is the president of Parker Financial LLC, an independent fee-based wealth management firm. Located at 9 2 3 0 Bayshore Drive Northwest Suite 2 0 1, Silverdale, Washington. For additional information, call 3 6 0 3 3 7 2 7 0 1 or visit us online@soundretirementplanning.com.

470 War and Stock Market Volatility