How War Affects the Stock Market
People panic-sell during war. The data says that's the wrong move every single time.
Here's what the research actually shows:
The CFA Institute studied major wars going back to 1926.
Across all of them — stocks returned +11.4% on average.
A separate study looked at 25 major geopolitical events:
🔵 Day 1 after the event: -1.1%
🔵 Market bottom: -4.7% (reached in ~19 days)
🔵 Full recovery: ~41 days
Six weeks of volatility. Then back to normal.
That's the pattern. It's been remarkably consistent for 100 years.
🛡️ Stocks that historically benefit during prolonged conflict: Defense & Aerospace (direct exposure):
LMT — Lockheed Martin (F-35, missiles, advanced weapons systems)
RTX — Raytheon Technologies (Patriot missiles, Stinger, defense electronics)
NOC — Northrop Grumman (B-21 bomber, space & cyber defense)
GD — General Dynamics (tanks, submarines, Gulfstream jets)
LHX — L3Harris (comms, electronic warfare, ISR systems)
HII — Huntington Ingalls (nuclear aircraft carriers & submarines — sole builder)
LDOS — Leidos Holdings (defense IT, AI-driven intelligence systems)
KTOS — Kratos Defense (drones, hypersonic tech — higher risk/reward)
PLTR — Palantir (AI data analytics, heavy DoD contracts)
TDG — TransDigm (aerospace components, highly recurring defense revenue)
🚀 Defense ETFs (diversified exposure):
NATO — the one I personally own and like
ITA — iShares U.S. Aerospace & Defense ETF
XAR — SPDR S&P Aerospace & Defense ETF (equal-weight, more small-cap exposure)
The takeaway:
Geopolitical events are terrifying in real time. But historically, they're buying opportunities — not reasons to sell.
Every person who panic-sold during a major war over the last 100 years left money on the table.
The market has survived two World Wars, Korea, Vietnam, Gulf War, 9/11, Iraq, Ukraine. It's still here. It's still compounding.
Don't let the news cycle override 100 years of data.
