The last week has been tough for markets. We’ve had several days of falls, predominantly as markets start to get to grips with the likely economic impact of the war in Iran. No one knows how or when the war will end, but it’s clear that economic disruption is already beginning to occur, which is rattling markets. The UK market has fallen about 10% over the past few weeks, broadly comparable to declines in other global markets, while the price of oil has increased from c.$72 per barrel to c.$108.
It is easy to get caught up in the emotion and fear that markets are exhibiting, but during a crisis calm and rational thinking are called for more than ever. I always like to look back on previous periods of volatility and use the experience of those events we have endured to put things into context. Mark Twain allegedly wrote that “History doesn’t repeat itself, but it does rhyme”. It’s quite an apt statement when applied to stock markets. Whilst we’ve never had to deal with a crisis quite like this, we have faced numerous financial, economic and political crises over the years. Notable ones from the past forty years include:
• Bursting of the Japanese asset price bubble of the 1980s
• Black Monday in 1987 (markets fell over 22% in one day)
• Black Wednesday in 1992 when the government withdrew from the Exchange Rate Mechanism (ERM)
• The 1997 Asian Financial Crisis
• The 1998 Russian crisis and the collapse of Long-Term Capital Management
• The bursting of the dot-com bubble between 2000–2003
• The terrorist attacks on September 11th, 2001
• The Global Financial Crisis between 2007–2009
• The Eurozone crisis between 2011–2012
• The oil crisis of 2015 when oil fell from $120 to $28 per barrel
• The Scottish referendum
• The Brexit referendum
• The escalating trade war in 2018
• The Covid pandemic in 2020 (markets fell over 30% in one month)
• The war in Ukraine and the “Omnicrisis” of 2022
• Trump’s tariffs in 2025
All of these events led to significant market falls, in many instances declines of more than 20%. Yet markets recovered each time. Markets will recover this time as well. Uncertainty and volatility will continue until a political resolution is reached or markets become comfortable with the economic fallout.
The graph below from JP Morgan looks at returns for a US balanced portfolio following previous crises. Whilst the exact figures will differ, the principles hold true for UK portfolios as well, although it is important to remember that past performance is no guide to future returns.
The long-term intrinsic value of most businesses has not been fundamentally impacted by this crisis. Share prices moving violently on a minute-by-minute basis can create a great sense of despondency and the illusion that business prospects are rapidly changing. There are, of course, short-term issues, but companies over the long term are valued based on their long-term cash flows, not short-term sentiment.
In the words of one of the most famous investors of the twentieth century, Benjamin Graham: “In the short run, the market is a voting machine but in the long run it is a weighing machine”. His protégé, Warren Buffett, took a slightly more proactive approach to market panic: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful”.
The graph below looks at the world stock market and plots intra-year falls compared with calendar-year returns — in other words, how much the market fell to its lowest point in a given year, and how much it finished up or down at the end of that year compared with the starting point.
As you can see, it is very common for markets to fall quite significantly during a year but still recover strongly and finish the year with a positive return.
As many know, markets, businesses and economies move through cycles, and the peaks and troughs are an integral part of that process. Investors’ emotions also tend to correspond with market cycles, changing as we move through different phases.
The Cycle of Market Emotions
It’s important to recognise the role emotion can play in investing, but recognising it is the first step in managing it. Fear, desperation, panic, capitulation, despondency and depression are all emotions that investors may feel about markets during periods like this. However, calm and rational thinking will prevail, and for patient and logical investors these periods can create opportunities to generate attractive long-term returns.
All of this is occurring as we approach the end of the financial year, when many people are considering ISA and pension contributions. It can be difficult to think about these matters at times like these, but investors should not allow short-term market emotions to change their long-term investment strategies.
As Warren Buffett also said: “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it”.
As ever, please do get in touch with your usual adviser if you have any questions.
By Dan Boardman-Weston
Chief Executive
Market Update – March 2026
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The last week has been tough for markets. We’ve had several days of falls, predominantly as markets start to get to grips with the likely economic impact of the war in Iran. No one knows how or when the war will end, but it’s clear that economic disruption is already beginning to occur, which is rattling markets. The UK market has fallen about 10% over the past few weeks, broadly comparable to declines in other global markets, while the price of oil has increased from c.$72 per barrel to c.$108.
It is easy to get caught up in the emotion and fear that markets are exhibiting, but during a crisis calm and rational thinking are called for more than ever. I always like to look back on previous periods of volatility and use the experience of those events we have endured to put things into context. Mark Twain allegedly wrote that “History doesn’t repeat itself, but it does rhyme”. It’s quite an apt statement when applied to stock markets. Whilst we’ve never had to deal with a crisis quite like this, we have faced numerous financial, economic and political crises over the years. Notable ones from the past forty years include:
• Bursting of the Japanese asset price bubble of the 1980s
• Black Monday in 1987 (markets fell over 22% in one day)
• Black Wednesday in 1992 when the government withdrew from the Exchange Rate Mechanism (ERM)
• The 1997 Asian Financial Crisis
• The 1998 Russian crisis and the collapse of Long-Term Capital Management
• The bursting of the dot-com bubble between 2000–2003
• The terrorist attacks on September 11th, 2001
• The Global Financial Crisis between 2007–2009
• The Eurozone crisis between 2011–2012
• The oil crisis of 2015 when oil fell from $120 to $28 per barrel
• The Scottish referendum
• The Brexit referendum
• The escalating trade war in 2018
• The Covid pandemic in 2020 (markets fell over 30% in one month)
• The war in Ukraine and the “Omnicrisis” of 2022
• Trump’s tariffs in 2025
All of these events led to significant market falls, in many instances declines of more than 20%. Yet markets recovered each time. Markets will recover this time as well. Uncertainty and volatility will continue until a political resolution is reached or markets become comfortable with the economic fallout.
The graph below from JP Morgan looks at returns for a US balanced portfolio following previous crises. Whilst the exact figures will differ, the principles hold true for UK portfolios as well, although it is important to remember that past performance is no guide to future returns.
The long-term intrinsic value of most businesses has not been fundamentally impacted by this crisis. Share prices moving violently on a minute-by-minute basis can create a great sense of despondency and the illusion that business prospects are rapidly changing. There are, of course, short-term issues, but companies over the long term are valued based on their long-term cash flows, not short-term sentiment.
In the words of one of the most famous investors of the twentieth century, Benjamin Graham: “In the short run, the market is a voting machine but in the long run it is a weighing machine”. His protégé, Warren Buffett, took a slightly more proactive approach to market panic: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful”.
The graph below looks at the world stock market and plots intra-year falls compared with calendar-year returns — in other words, how much the market fell to its lowest point in a given year, and how much it finished up or down at the end of that year compared with the starting point.
As you can see, it is very common for markets to fall quite significantly during a year but still recover strongly and finish the year with a positive return.
As many know, markets, businesses and economies move through cycles, and the peaks and troughs are an integral part of that process. Investors’ emotions also tend to correspond with market cycles, changing as we move through different phases.
The Cycle of Market Emotions
It’s important to recognise the role emotion can play in investing, but recognising it is the first step in managing it. Fear, desperation, panic, capitulation, despondency and depression are all emotions that investors may feel about markets during periods like this. However, calm and rational thinking will prevail, and for patient and logical investors these periods can create opportunities to generate attractive long-term returns.
All of this is occurring as we approach the end of the financial year, when many people are considering ISA and pension contributions. It can be difficult to think about these matters at times like these, but investors should not allow short-term market emotions to change their long-term investment strategies.
As Warren Buffett also said: “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it”.
As ever, please do get in touch with your usual adviser if you have any questions.
By Dan Boardman-Weston
Chief Executive
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