March Madness and a Little Perspective

For any college basketball fans reading, you know March brings the madness of the NCAA basketball tournament. For those who don’t follow, I am referring to the three-week, 68-team single-elimination tournament known for upsets and unforgettable moments that starts next week. However, the madness of March seems to have already begun in the markets.

The Israeli and U.S.-led conflict against Iran has essentially shut down the Strait of Hormuz through which about 20% of the world’s oil supply passes. This has caused the price of oil to jump roughly 40% since the start of the conflict, which in turn has caused equities around the globe to pull back. This is where a little perspective is needed, because some of the current headlines are sensational.

As we noted in last week’s update, doing nothing is something. It’s important to stay focused on the big picture, and the numbers tell a very different story depending on how they are framed. Let’s compare some recent headline numbers with performance over a full 12-month period.

• One day last week, the Korean stock market fell dramatically by over 12%. What was not as widely reported is that it is still up over 100% for the past year[i]
• The Nikkei (Japanese stock market) has fallen almost 12% since the conflict began, but is up over 45% over the last year[ii]
• The swings have not been as dramatic in China, with its stock market only down 2% since the highs of late February, while holding onto a 20% year-long gain[iii]
• It’s a similar story across Europe, where stocks have fallen by about 7% since their highs but are still up over 17% year-over-year[iv]

If you are more of a visual person, the charts below tell the same story. Pullbacks are never fun but must be looked at through a wider lens. The S&P 500 has been up significantly over the last 12 months, and the movement has been even more dramatic since 2023.

The stats above indicate to me that not only are investors spooked by the current geopolitical events, but also some of the selling may be profit-taking after a few good years in the markets.

I don’t have any grand insight into as to when the Iran conflict will end or what an end will even look like. What I do believe is that there will be a resolution at some point, and oil prices will eventually settle down. Equity prices could likely find a bottom when that happens. Headlines, whether on TV, in print, or online, love to sell fear and hyperbole. “Stock market X falls 12%,” “5% pullback for S&P,” “800 points off the Dow,” all sound ominous until your perspective changes by looking longer term, and that is what we have done and continue to do. To repeat last week’s message, we will use current volatility to rebalance accounts and/or put idle cash to work when and where it is appropriate.

In closing, let’s revisit March Madness. For blue blood schools like Duke, Kansas, Arizona, and Kentucky, playing in the NCAA tournament is something their fans count on every March, but perspective is important here as well. For my school, the University of Georgia, that is not the case. The tournament has been played annually (except in 2020) since 1939, and this will mark only the 14^th time they have made it. This writer is hoping the madness shifts from the global events we currently see and onto the basketball court.

Will

P.S. – This was written before President Trump mentioned that the war may end “soon.” We hope this is the case and will provide an update as the situation develops.

Disclosure: The opinions in the preceding commentary are as of the date of publication and are subject to change. Information has been obtained from third-party sources we consider reliable, but we do not guarantee the facts cited are accurate or complete. This material is not intended to be relied upon as a forecast or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict the performance of any investment. Investors should consult their financial advisor on the strategy best for them. Past performance is no guarantee of future results.

[i] https://www.reuters.com/world/asia-pacific/korean-stocks-dive-won-hits-17-year-low-iran-conflict-2026-03-04/

[ii] https://www.cnbc.com/quotes/.N225

[iii] https://www.cnbc.com/quotes/.SSEC

[iv] https://www.morningstar.com/etfs/arcx/vgk/performance