Panic is not a Strategy: Why We Aren’t Flinching

Emotions are running high and the market has weakened. The HCM-BuyLine^® is positive, and if broken we will reduce risk, but we will keep our emotions in check in any case. If the trend does change, we do not think it will take much to turn it back up. Our call on the S&P 500 is still 7700 by year-end.

We believe the dustups in the Middle East should be seen as more of a buying opportunity than as “Oh my goodness, let’s run for the hills!” Some are making comparisons to the Iraq war in 2003, or Russia’s “special military operation” attack on Ukraine in 2022. They suggest that the current war, like those conflicts, could last for years rather than weeks or months. That comparison adds weight to the uncertainty of the moment creating lots of emotions. The mind hates not knowing the outcome. We want immediate satisfaction, especially in this day and age.

However, think back to the Iraq war. Markets moved sharply at times. Oil prices spiked. There were times of deep uncertainty. Yet, over the full span of that conflict, the U.S. economy continued to grow. Businesses continued to operate. Long-term investors who stayed disciplined were not destroyed.

There is another factor in this moment: unpredictability. The Trump administration has shown that tone and policy can change quickly. That back-and-forth can feel unstable. Any good news should send stocks higher and oil lower. Like I wrote last week, we think investors should move your stops up on their oil trade.