Investing Strategies Amid Wars and Geopolitical Uncertainty
2026 is proving to be the year of rotation…and heightened risks.
There’s a game plan to know when markets gyrate.
We’ll outline smart investing strategies amid wars and geopolitical uncertainty.
Let’s look backwards for a moment. Coming into 2026, we prepared you for heightened volatility in mid-term election years.
We also made the bold non-consensus call to buy small-cap stocks aggressively.
Looking at the YTD scorecard, the large-cap S&P 500 has struggled, gaining just .35%.
Small-caps, on the other hand, have surged with the S&P Small Cap 600 vaulting +7.86%.
These prescient forecasts were made due to evidence-based research. Aggressive shifts in our unique data signaled big changes were ahead for markets.
And the latest setback is rooted in a war with Iran. This conflict caused stocks to plunge while volatility surged to multi-month highs.
You may be wondering, “What’s an investor to do during these uncertain moments?”
We’ve got you covered.
Today we’ll unpack reasons to keep a calm head amid geopolitical uncertainty…and we’ll showcase areas to overweight when chaos strikes.
Let’s begin.
Investing Strategies Amid Wars and Geopolitical Uncertainty
Investing in 2026 hasn’t been easy.
Stocks have been rotating wildly.
And the latest heightened risk is the US attack on Iran. Below is a 5-month chart of the S&P 500 and I’ve circled the market selloff earlier this week:
While wars are never easy deal with, as investors we need to have a gameplan when geopolitical risks hit.
It’s easy to think that moving to cash is the best option.
However, history suggests that’s a mistake.
Here’s a long list of major geopolitical events going back to 1979 and the forward returns for stocks.
After major geopolitical events, the S&P 500 averages:
- 1-month returns of -.4%
- 3-month returns of +1.8%
- 6-month returns of +6.2%
- 12-month returns of +9.5%
While near-term returns are muted, markets tend to shrug off these events eventually:
Diving further, S&P 500 returns post Middle East wars and conflicts reveal event stronger equity performance.
After major Middle East geopolitical events, the S&P 500 averages:
- 1-month gains of +1.8%
- 3-month gains of 4.8%
- 6-month gains of +12.6%
- 12-month gains of +16.4%
If there’s a message to heed, don’t bail out of stocks just because of international conflicts.
But you should prepare for heightened volatility around these events. On Tuesday, the CBOE Volatility Index (VIX) surged to multi-month highs, closing at 23.57:
When the VIX explodes, stocks drop violently.
Turns out, that’s a hidden opportunity for stock pickers.
Since 2015, when the VIX closes above 23.5, it’s been a great time to buy stocks.
Here’s the proof.
Over the past decade, whenever the VIX closes above 23.50, the S&P 500 averages:
- 1-month gains of +2.7%
- 3-month gains of +6.5%
- 6-month gains of +11.3%
- And 12-month gains of +21.2%
Odds favor the bulls here.
Now, the million-dollar question is which stocks to you overweight during heightened uncertainty and market declines.
For that, we’ll turn to market history.
Dividend paying stocks massively outperform during S&P 500 corrections of 10% or more.
Since 1975, during S&P 500 corrections of 10% or more, dividend paying stocks outperform the average stock by 5.5%.
Even more striking is the fact that dividend payers outperform non-payers by 13.7%:
And if you think investing in dividend stocks is a new idea in 2026…think again.
Our sector ranks have favored dividend-rich sectors like Energy, Utilities, Materials, and Industrials for months.
Here’s our latest sector ranks:
And to prove how these groups have been heavily supported by institutions, take a look at Archrock (AROC), which is a service and equipment operator for oil and gas production.
It’s a smaller company with a market cap of $6.5 billion.
But note the continual increases in dividend payouts throughout the years. At last measure the forward yield stands at 2.5%:
And while Energy stocks have been the focus in the media this past week, they’ve been aggressively owned since January.
Below on the left plots the 3-month flow picture for AROC. On the right (blue bars) highlights how the stock is one of the highest rated companies in our equity universe:
And it’s not just smaller players in the energy patch.
Diamondback Energy (FANG), which is a $50 billion market cap oil and gas developer, has seen similar support from Big Money players.
At last measure the forward yield for FANG sits at 2.47%.
Healthy inflows have been the story since January:
And I should note, Energy stocks were one of our top picks heading into 2026.
So there you have it.
Don’t overreact to geopolitics. Markets tend to recover months later.
A smart bet is to own high-quality dividend growth stocks.
They offer ballast during choppy seas.
And just recently for PRO subscribers, we built a screener allowing you to search for our top-ranked stocks by sector, with many fundamental criteria, including dividend yield.
This allows you to quickly find our best stocks loved by institutions…that’s how you stay ahead of the crowd!
There are always winners in any tape…MoneyFlows finds them for you…EARLY.
Make 2026 your best year yet.
Our PRO subscription allows you to spot daily flows and access our weekly Outlier 20 report.
This is the report that has found EVERY SINGLE ONE of our Outlier stocks.
Professional money managers and RIAs looking for additional portfolio solutions including ETF flows & ranks and your own Portfolio Tracking tools, please reach out about our Advisor Solution and Emerging Advisor Program.
AND don’t miss a deep dive conversation between Jason Bodner and CNBC contributor Michael Khouw discussing strategies to outperform when volatility strikes.
This was a fun informative chat!
***Lastly, join co-founder Jason Bodner LIVE, April 9-11, 2026, at the MoneyShow Masters Symposium in Hollywood, FL. As he presents: Use Money Flows to Find the Next Wave of Growth Stocks.
You don’t want to miss this! Click the image below to register now.
