When headlines are unsettling, it’s natural to wonder what they might mean for your finances. My role is to keep a steady hand on the tiller and communicate clearly, so you can stay confident in your long‑term plan.
It has been eleven days since coordinated U.S.–Israeli strikes targeted Iranian missile assets and senior leadership. Since then I’ve been speaking with economists and specialist investment managers and monitoring markets closely, including the impact on our portfolios.
This note summarises what has happened, what we’re watching, and—most importantly—how your investments are positioned. I will continue to update you as reliable information becomes available.
A quick reminder: unless funds are held entirely in cash, investment values and the income they produce will move up and down from time to time. Periods of volatility are normal and expected; they do not, on their own, change your long‑term goals or our disciplined process.
What has happened so far (briefly)
On 28 February 2026, the U.S. and Israel launched large‑scale, coordinated strikes against Iran’s nuclear and military infrastructure. The action followed months of failed talks, faster uranium enrichment and years of ‘shadow conflict’, including a 12‑day flare‑up in June 2025.
- Joint strike initiation (28 Feb 2026) targeting missile sites and leadership.
- June 2025 ‘12‑Day War’ involving Israeli strikes and Iranian drone/missile retaliation.
- Nuclear concerns elevated after talks collapsed in 2025.
- Reports of regime‑change objectives and efforts to curb nuclear ambitions.
- Context of ongoing regional tensions since October 2023.
How markets typically react—and what we’re watching
Markets often move quickly to re‑price uncertainty. Recently, oil spiked toward USD $119 before easing on hopes of de‑escalation, and equities have been choppy. A shorter, contained conflict remains more likely than a protracted one, but near‑term swings in both oil and shares are still possible.
Locally, the RBA may prefer to wait and assess whether any inflation lift from energy prices proves temporary before adjusting rates.
Two practical scenarios we plan for
Limited conflict (various investment specialists’ base case)
De‑escalation within weeks allows energy markets to stabilise. We may still see short‑term spikes in oil and dips in shares, followed by relief. For disciplined, long‑term investors, this can open selective buying opportunities in quality assets.
Prolonged conflict (risk case)
Iran could sustain pressure in the Strait of Hormuz, keeping supply tight and oil elevated. In that case, equity markets could experience a deeper, longer drawdown. We would emphasise resilience, diversify energy exposure and lean into high‑quality defensive assets as needed.
What this means for your portfolio
- Short term: volatility is likely to remain elevated. Portfolios maintain appropriate liquidity and balance across growth and defensive assets.
- Risk management: portfolios are diversified across asset classes, regions and managers; this reduces the impact of any single event.
- Opportunities: dislocations can allow us to upgrade quality—adding to strong businesses at better valuations—without taking undue risk.
- Process: Investment Managers in actively managed funds continue to rebalance thoughtfully and avoid attempts to ‘time’ headlines, which is rarely successful and can harm long‑term outcomes.
What we’re hearing from managers
Most of our managers expect disruption to be contained, with clear risks around energy and inflation if escalation persists. Others see air activity continuing for weeks rather than months with capability degrading over time—consistent with a shorter‑lived energy impact. We factor both views into portfolio settings.
What if the Iran war is not short-lived?
Analysts say a drawn-out conflict could have dramatic consequences for energy markets and inflation.
- Analysts say a prolonged war in Iran could push up energy prices and reignite the threat of inflation.
- Markets already expect the Federal Reserve to be more attentive to inflation risks than it was in recent weeks.
- The longer the oil shock persists, the more pronounced the economic consequences will be, according to analysts.
A key choke point is the Strait of Hormuz, through which a meaningful portion of global oil flows. Even brief disruption can move prices quickly.
Why oil matters more than the headlines
Around one‑fifth of global oil travels through the Strait of Hormuz; LNG flows are harder to reroute. Price spikes can lift inflation readings in the short‑term and delay rate‑cut timelines, though not necessarily cause recession on their own.
The wider backdrop and how we prepare
The last few years have seen a shift toward greater geopolitical competition and supply‑chain complexity (Russia–Ukraine, Middle East instability, U.S.–China rivalry, tensions around Taiwan and the South China Sea, and conflict across parts of Africa and the Caucasus). Our portfolios are constructed with this environment in mind.
In practice, that means blending high‑quality growth, resilient income, inflation‑aware assets and true diversifiers; maintaining liquidity; and using rebalancing and risk controls to keep portfolios aligned to your goals.
A cautionary note
Stay one step ahead of scammers Periods of market volatility can attract increased scam and phishing activity. We encourage you to stay vigilant by taking a few simple steps to help protect your account:
- Ensure multi‑factor authentication is enabled
- Check your email address and mobile number are up to date in your online account
- Keep your devices and apps up to date with the latest software updates
- Be cautious of unexpected emails, texts or calls.
A personal note
Thank you for your trust. If the news flow is causing concern, please contact me. I’m here to talk through your plan, your goals and any adjustments that might help you feel more comfortable while staying on track.
Please click here to read the latest Insights article on the Impact of the US/Iran war on economies and markets – Q and A, published by Dr Shane Oliver, Head of Investment Strategy and Chief Economist, AMP.
Warm regards,
Sara Millard
Owner & Principal Financial Adviser
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