Wars, conflicts, and sinister events have a negative impact on markets. Such events are not calamities for the market. Instead, these are excellent buy opportunities as scared investors sell off at any rate to exit the market. Note that even the decline from Pearl Harbour Attack recovered in less than a year. Next time you are scared by a conflict, ask yourself if it is more significant that Pearl Harbour. If not, it is probably a buying opportunity.
How S&P 500 Responded To Previous Conflicts
| Event | Date | Total sell-off | Days to bottom | Days to recover |
|---|---|---|---|---|
| U.S. pulls out of Afghanistan | 8/30/2021 | -0.1% | 1 | 3 |
| Iranian general killed in airstrike | 1/3/2020 | -0.7% | 1 | 5 |
| Saudi Aramco drone strike | 9/14/2019 | -4.0% | 19 | 41 |
| North Korea missile crisis | 7/28/2017 | -1.5% | 14 | 36 |
| Bombing of Syria | 4/7/2017 | -1.2% | 7 | 18 |
| Boston Marathon bombing | 4/15/2013 | -3.0% | 4 | 15 |
| London subways bombing | 7/5/2005 | 0% | 1 | 4 |
| Madrid bombing | 3/11/2004 | -2.9% | 14 | 20 |
| U.S. terrorist attacks | 9/11/2001 | -11.6% | 11 | 31 |
| Iraq’s invasion of Kuwait | 8/2/1990 | -16.9% | 71 | 189 |
| Reagan shooting | 3/30/1981 | -0.3% | 1 | 2 |
| Yom Kippur war | 10/6/1973 | -0.6% | 5 | 6 |
| Munich Olympics | 9/5/1972 | -4.3% | 42 | 57 |
| Tet Offensive | 1/30/1968 | -6.0% | 36 | 65 |
| Six-Day War | 6/5/1967 | -1.5% | 1 | 2 |
| Gulf of Tonkin Incident | 8/2/1964 | -2.2% | 25 | 41 |
| Kennedy Assassination | 11/22/1963 | -2.8% | 1 | 1 |
| Cuban Missile Crisis | 10/16/1962 | -6.6% | 8 | 18 |
| Suez Crisis | 10/29/1956 | -1.5% | 3 | 4 |
| Hungarian Uprising | 10/23/1956 | -0.8% | 3 | 4 |
| N. Korea Invades S. Korea | 6/25/1950 | -12.9% | 23 | 82 |
| Pearl Harbor attack | 12/7/1941 | -19.8% | 143 | 307 |
| Average | -4.6% | 20 | 43 |
