Historical Stock Market Performance during War Times.... Geopolitical conflict tends to cause market volatility, at least in the early days. Logically, investors might assume that the volatility continues throughout war times, but history shows that this isn’t the case.
Yes, during the pre-war phase, stock prices decline due to uncertainty, but once war begins, the stock market goes up. Most of the pre-war volatility subsides, and investors enjoy relative stability. It is worth noting that when there is no escalation period and war breaks out suddenly, without warning, stock prices drop before eventually climbing.
The bottom line is that investors who want to get as close to a sure thing as possible in the stock market would do well to invest in defense companies when war breaks out. Otherwise, generally speaking, early drops tend to be followed by steady gains, so there is no need to panic if the stock market declines during war time.
Of course, the world is changing, and historical patterns may not hold true in future conflicts. Stock market behavior is heavily dependent on context, as well as myriad internal and external factors that combine to create long-term trends – for example, earnings, valuation, inflation, interest rates, and overall economic growth. That means, regardless of world events, investors should maintain proven strategies to protect and grow portfolios.
https://financhill.com/blog/investing/do-stocks-go-up-during-war-times