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Economic Trends · Mar 16th, 2026
What this video’s about
In this episode of The Market Share, Paul Gifford, Chief Investment Officer at 1st Source Bank, speaks with Senior Portfolio Manager Pete Cahill about how investors can respond when uncertainty rises in global markets.
Conflict in the Middle East has introduced a new source of concern at a time when markets are already navigating technological change, mixed economic signals, and geopolitical tension. Drawing on more than 30 years of investment experience, Paul and Pete reflect on what history teaches about market resilience. They discuss why diversification remains essential and explain why corporate earnings continue to anchor long-term market performance.
Keeping perspective during uncertain times
Periods of geopolitical conflict naturally raise anxiety for investors. In moments like these, it’s important not to let that anxiety lead to rash decisions. Pete emphasizes that the first step is to pause and regain perspective.
“I just take a deep breath, take a step back, and make sure we’re framed on the long term and our client objectives,” he says.
Markets were already operating in an environment of elevated uncertainty before the current conflict. One example is the wide range of expectations surrounding artificial intelligence. Even conservative forecasts suggest dramatically different outcomes for market returns over the coming decade.
Rather than attempting to predict a single outcome, investors are better served by preparing for multiple possibilities. Diversification remains one of the most reliable ways to navigate that uncertainty.
What history tells us about markets and conflict
History offers useful perspective during difficult moments. While geopolitical events often trigger short-term volatility, market outcomes frequently differ from the fears investors feel in the moment.
“War is dreadful,” Pete explains, “but the investment realities are somewhat different than what our fears are.”
Looking across more than a century of market data, the S&P 500 has continued to advance through periods marked by wars and global conflicts. Markets often decline when uncertainty first emerges, yet over time economies adjust and markets recover.
Pete points to the invasion of Ukraine as a recent example. Fear and uncertainty were widespread when the conflict began, but the following three years produced strong market returns.
The lesson is not to dismiss risk. It is to remember that markets have repeatedly found ways to move forward despite it.
Corporate earnings remain the long-term driver
While headlines can dominate the short term, corporate earnings continue to shape long-term market direction.
The most recent earnings season illustrates that point. Expectations called for approximately 8 percent earnings growth. Actual results came in closer to 14 percent.
Over longer periods, the relationship between corporate profits and stock prices becomes clear. The two do not move in perfect alignment year by year, but earnings growth ultimately provides the foundation for market performance.
For that reason, the investment team continues to focus on diversified portfolios built around long-term fundamentals rather than short-term reactions.
Conclusion
Uncertainty is a constant feature of investing. Markets have navigated wars, economic shocks, and technological change for decades. Through each cycle, the combination of diversification, long-term perspective, and attention to corporate fundamentals has helped investors stay on course.
As events unfold in the months ahead, maintaining that perspective will remain essential.
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