Key insights
- The author argues that despite bearish headlines regarding US-Iran tensions, historical data suggests a market recovery after initial shocks from military escalations. They believe the 'war premium' is already priced in and selling index funds based on current news is a mistake. The author suggests this is a 'buy the dip' opportunity.
the headlines are 100% bearish, which is usually when the bottom is in. yes, the rhetoric is aggressive, but if you look at the historical data of military escalations in the gulf, the initial shock is almost always followed by a massive recovery once the actual 'scope' of the conflict is clear.
selling your index funds because of a tweet is how you miss the recovery. the 'war premium' is already high. unless we see a total global escalation, this looks like a classic overreaction.
are you guys actually selling, or is this just another 'buy the dip' opportunity that everyone is too scared to take?