No One Escapes the Bear Forever

Last year it was tariff announcements. This year it is the Iran war. In both cases, equity markets saw sharp declines before Easter, with “Liberation Day” on April 2, 2025, announced by U.S. President Donald Trump, triggering an even steeper drop.

Each time, fear and concern were palpable and calls to reduce equity exposure grew louder. We held our ground, advised clients to stay the course, and communicated intensively.

How could we be sure that this was the right decision? We could not.

Extreme and emotional.

No one knows the future, and among the many possible paths, a few are always disastrous. Tariffs can lead to a global economic slowdown and a prolonged bear market. The flames of a hot war can spread and ignite a broader conflict. Financial market panic could follow.

These extreme scenarios are what dominate our emotions. After all, who can rule them out? And yet their probability is low.

Because the moment the unexpected occurs, armies of people and computers are already working on new solutions and paths forward. The world is not made up of rigid structures, but of adaptive and complex systems. While some see the world grinding to a halt because a strait is blocked, others are already building the next version of tomorrow.

Crisis is always waiting.

There will come a day when we stay the course and equity prices fall further than we ever thought possible. No one predicted that markets would be cut in half during the financial crisis of 2008 and 2009. Yet that is exactly what happened.

Investors who were already panicking at minus 20% and seeking advice often stopped listening at minus 30% and sold their holdings. For a few weeks, that decision felt right. But in most cases, reentry came too late or did not happen at all.
Years later, those who stayed invested, who held on to their strategy and endured the difficult period, achieved the better outcome.

At some point, the major crisis will hit. Even if tariffs or the Iran war were not the trigger, the next event could be. The best defense is to review your investment strategy during good times, not in the middle of stress. Was your equity allocation set at a level that allows you to withstand a severe crisis? If the answer is clearly yes, you are well positioned. If not, please reach out to us.