Dear Client,

You would have seen and heard about the US-Israel-Iran conflict that started last weekend. As your financial adviser, I felt it was important that I update you regarding the air strikes’ current and potential impact on your investments.  Do rest assured, my team and I are monitoring the situation as it evolves. This enables us to oversee your portfolio effectively. It also means we can help you understand what's going on. We hope you will find this analysis of the recent events in Iran and the Middle East useful.

This update is made up of facts and opinions compiled from many renowned sources including wealth managers, broadsheet news media and my own experience. It is designed to be an extract of the key issues only. The details in here are correct as at the date of this briefing note.  There is an enormous political backdrop to this current conflict; I will try to steer clear of expressing any partisan views or commenting on the humanitarian perspectives.

Oil and gas

The conflict in the Middle East is spreading to several countries in the region. Over the next few days and weeks, you may hear and read a lot about the Strait of Hormuz, Liquefied Natural Gas (LNG) and shipping containers. All this uncertainty points towards to higher inflation, slower global trade and lesser economic output.

Commodities such as oil and gas are a vital part of the global economy as they play a role in farming, manufacturing, utilities, transportation, retail – even waste disposal. If the supply of these raw materials slows down or their cost shoots up, it would have a proportionate effect on economies all over the world. The oil price and the US dollar are also linked.   The longer this conflict goes on, the more the likelihood that it will lead to higher prices - for all of us, and for longer. That’s everything from our food and clothes shopping to utility bills and travel costs. 

Alloyed to this, the more complex things get economically, politically and militarily, the more the probability that central banks (such as the Bank of England, US Federal Reserve) will find it hard to cut interest rates soon. This could adversely affect the bond markets due to inflation concerns. (Your portfolio is partly in shares and partly in bonds)

The FTSE, Dow Jones, NASDAQ etc

“But what about stock markets?” I hear you ask.  When we meet, I can show you a range of graphs and statistics dating back decades which point to one fact : Financial markets suffer during times of uncertainty. Unfortunately, with so many different monetary instruments, derivates and index-tracking schemes that have become available over the years, movements in financial markets (up or down) often get significantly exaggerated. Also, with the internet, social media and 24-hour news channels, any information, rumour or sentiment can travel across the world in seconds.  Increasingly over the last decade, we have seen that this can trigger further waves of buying or selling of equities (i.e. shares) by investors and speculators alike.

The last few years have also seen an exponential rise in Artificial Intelligence (AI). We even see it when we type something into a search engine : Gemini, Copilot etc. provide instant summaries of what we may be looking for.  The AI boom had led to the company Nvidia being valued at over $4,000,000,000,000 ($4 trillion). Meanwhile, Palantir Technologies shares have gone up such that £1,000 invested in January 2024 would have been worth £10,000 recently. But in times of uncertainty, even prices of such doyenne shares often drop sharply. Sometimes, panic sets in and this leads to further price corrections in other equities – as mentioned earlier.  Some financial commentators have been suggesting that the AI sector is over-priced and a major crash is overdue.  This current conflict may become a catalyst for a sizeable selloff in AI shares.  It might not stop there : in response, shares in related and even uncorrelated assets could plunge. In such a scenario, stock markets all over the world would temporarily fall sharply. This normally makes headlines on news bulletins everywhere.

So, what should you do?

Source : Quilter March 2026 Q1 26736/205/15107

1. Have a long-term view 

If these pessimistic scenarios come to pass, then your money needs to be in the right place to recover in value and benefit from an uplift when markets go up. (I deliberately used the word ‘when’ not ‘if’ ) As a rational investor, it is important not to sell an investment as a knee-jerk reaction if its value goes down temporarily.  I’m sure you know that anyway. The graph above shows that those who keep hold of their investments, make more over the long term than those who miss out when stock markets jump.

2. Remember : your investments are well-diversified 

I have comprehensively spread your money in a range of different:

1. financial markets globally - in proportion to their size.
2. international assets (shares, government and corporate bonds, etc) 
3. sectors (banks, household goods, utilities, technology and many more) 

All this is to aim for a balanced portfolio which has the best potential to grow over time - with no unnecessary exposure or duplication.

3. Rest assured : Your portfolio is being managed by professionals

In addition to the above, I have placed your investments with leading, highly-respected and experienced fund managers.  They are watching the events in the Middle East very closely to understand the various scenarios that might play out and their likely impact on portfolios.  Some are taking tactical positions. This means for a short while, they may ‘tilt’ their portfolio to manage risk in a higher-inflation, more volatile world.  

My team and I will continue to work on your behalf. Rest assured that if we deem it necessary to update you again, we will do so accordingly. Meanwhile, feel free to get in touch with me if you have any questions.

Yours sincerely,

Kuldev Sehra

IFA Director, Richmond Financial Advice