While the escalating military conflict between the U.S. and Iran has sparked short-term market anxiety, historical S&P 500 data reveals a massive 685% average return 20 years after a war begins, explaining why wealth management firm Creative Planning calls such conflicts a long-term “boost for asset owners.”
Long-Term Growth Over Short-Term Volatility
Recent clashes near the Strait of Hormuz, including U.S. strikes on Larak Island rocket launchers and retaliatory drone attacks by the Islamic Revolutionary Guard Corps on bases in Jordan, led to immediate market pullbacks. Dow futures fell 0.16%, and Brent crude surpassed $91 per barrel, up 6.05%. However, historical data suggests early volatility shouldn’t deter investors.
According to an analysis of U.S. military conflicts compiled by Charlie Bilello, Chief Market Strategist at Creative Planning, the S&P 500 index consistently climbs higher over the long run.
Looking back to World War II, the stock market averaged a 3% return after three months of a conflict, expanding to 12% at the one-year mark, 94% over five years, and a staggering 685% after 20 years.
