March was marked by escalating conflict in the Middle East. Since the outbreak of the conflict, markets have reacted accordingly: equity declines, rising volatility, and increases in energy prices — particularly crude oil — amid fears of disruptions in the Strait of Hormuz.
However, a more measured analysis allows for less alarming conclusions. Over recent weeks, Iran’s response capacity and effectiveness have weakened, while the United States and Israel have achieved clear military superiority, destroying much of Iran’s offensive infrastructure. The probability of a broader regional escalation has therefore remained relatively contained.
The market’s focus remains on the Strait of Hormuz. Fear of a prolonged closure has been the primary catalyst behind tensions in financial assets. Nevertheless, several factors suggest that this risk may be temporary.
On one hand, Iran’s operational capacity to sustainably block maritime traffic appears limited. On the other hand, there are strong economic and geopolitical incentives to avoid such an outcome. China — one of Iran’s key allies — depends heavily on that energy flow and has actively pressured to keep the route open.
From a political perspective, there are also visible signs of restraint. The U.S. administration, pressured by the impact of gasoline prices on voters and by the proximity of midterm elections, has clear incentives to avoid a prolonged escalation.
Likewise, concerns about appearing excessively aligned with Israeli interests rather than prioritizing the “America First” agenda suggest that the conflict’s duration could remain limited.
In fact, political rhetoric has evolved from more ambitious objectives toward a more pragmatic approach focused on containing Iran’s nuclear program rather than pursuing regime change.
The implications for markets are clear: elevated short-term uncertainty and declines in financial asset prices, which continue to respond primarily to emotional dynamics in the short run.
For investors with medium- and long-term horizons, the key is not to anticipate every turn in the conflict, but rather to understand that volatility is an inherent part of the investment process.
Empirical evidence consistently shows that attempting to adjust portfolios based on geopolitical events is usually counterproductive. The largest investment mistakes are often made precisely during these periods of uncertainty, when decisions become driven by noise rather than fundamentals.
At Asset Growth, our message remains clear: discipline, perspective, patience, and composure.
If the central scenario remains that of a contained conflict with limited macroeconomic impact, market declines should be interpreted more as an opportunity than as a threat.
Within this context, there are two strategies we have implemented.
The first is maintaining positions, avoiding impulsive decisions that could compromise future returns.
The second, for those with sufficient risk tolerance and investment capacity, is using price corrections as opportunities to increase exposure to risk assets.
This is not about minimizing risks — risks certainly exist — but about putting them into perspective.
Markets have consistently demonstrated a remarkable ability to adapt over time, even in environments far more complex than the current one.
Crises — whether financial, health-related, or geopolitical — eventually fade, while economic growth and long-term value creation continue their course.