For Retail Investors

We are writing to provide our thoughts on recent geopolitical developments, particularly the evolving situation in Iran and the Middle East, which has understandably attracted significant media attention and has contributed to market volatility.

The escalating situation

Over recent months, Iran has experienced a convergence of political, economic, and geopolitical pressures. Internally, the country has been facing a severe economic crisis marked by high inflation, reduced purchasing power, and widespread public dissatisfaction. These conditions contributed to nationwide protests beginning in late 2025, which were met with significant government intervention and international scrutiny.

At the same time, tensions between Iran and Western nations have escalated. New sanctions have been introduced alongside ongoing diplomatic negotiations, while military developments in the region have increased geopolitical risk. Recent events have included military strikes and retaliatory actions that have raised concerns about regional stability and global energy supplies.

A key global concern relates to the Strait of Hormuz, a strategic shipping route through which roughly one-fifth of the world’s oil supply passes. Disruption in this region has pushed oil prices higher and will trigger volatility across global markets. Financial markets typically react quickly to uncertainty. Equity markets have experienced temporary declines, while investors have shifted toward traditionally defensive assets such as government bonds and the U.S. dollar. While headlines may feel alarming, it is important to recognise that markets are responding primarily to uncertainty rather than confirmed long-term economic damage.

Geopolitical events have influenced markets throughout modern financial history. Conflicts, elections, and policy shifts often cause short-term price movements, but these movements rarely determine long-term investment outcomes.

Historically, markets tend to adjust rapidly as new information becomes clearer. Energy prices may rise temporarily due to supply fears, but global production adjustments, diplomatic efforts, and economic adaptation typically stabilise conditions over time.

Current volatility reflects three main factors:

1. Energy price uncertainty: Oil markets are particularly sensitive to Middle East developments.

2. Risk sentiment: Investors temporarily reduce exposure to perceived risk.

3. Policy expectations: Inflation and interest-rate outlooks may shift as energy prices change.

None of these factors, on their own, alter the long-term drivers of investment returns; global economic growth, innovation, productivity, and diversified corporate earnings.

What this means for your investments

Our portfolios and your financial plan more broadly will have been constructed with a well-diversified investment strategy which anticipates that geopolitical shocks will occur periodically. Diversification across regions, sectors, and asset classes helps mitigate the effect of any single event or country. Also, it should be noted that direct exposure to Iran within global investment markets is extremely limited due to longstanding sanctions.

Global companies operate across multiple regions, reducing reliance on any single geopolitical environment. In addition, energy price increases can benefit certain sectors, partially offsetting declines elsewhere. Market falls, while uncomfortable, are a normal and expected part of investing. Historically, periods of heightened uncertainty have often been followed by recovery as markets reprice risk and clarity improves.

What are our investment colleagues doing?

Our colleagues in Titan Square Mile are clear that their role is not to react emotionally to headlines but to evaluate events through a disciplined investment framework.

What they are focusing on:

• Maintaining diversified allocations aligned with long-term goals
• Monitoring liquidity and risk exposures continuously
• Avoiding short-term market timing decisions
• Identifying opportunities that volatility may create

Experience consistently shows that investors who remain committed to a long-term strategy are better positioned than those who attempt to move in and out of markets during periods of stress.

We continue to monitor several developments that may influence markets:

•    Diplomatic negotiations and potential de-escalation efforts
•    Stability of global oil supply routes
•    Central bank responses to energy-driven inflation pressures
•    Broader global economic growth trends

While uncertainty may persist in the near term, markets are adaptive systems. Businesses, governments, and investors adjust quickly, which historically limits long-lasting economic disruption.

It is natural for geopolitical events to feel unsettling, particularly when news coverage is intense. However, it is important to remember that global markets have successfully navigated wars, energy crises, financial shocks, and political transitions many times before. 

If you would like to discuss your portfolio, risk exposure, or market conditions in greater detail, we encourage you to contact your financial planner.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.