We are writing to address the significant geopolitical developments over the weekend involving the United States, Israel, and Iran. We know this is weighing on many of our minds, and we want to share our perspective and what it means for the way we manage our clients’ portfolios.
What Happened
On February 28, the United States and Israel conducted joint military strikes against Iran, including targets in Tehran. Iran’s Supreme Leader, Ayatollah Ali Khamenei, was killed in the strikes. Iran has declared 40 days of mourning and launched retaliatory attacks against U.S. military assets and allied positions across the Gulf, including targets in Israel, Bahrain, Kuwait, Qatar, and the UAE. The Strait of Hormuz, through which roughly one-fifth of the world’s seaborne oil flows, has experienced significant disruption. Regional airspace has been closed, and, predictably, energy markets are spiking in reaction to increased geopolitical tensions.
Why We Do Not React to Headlines
Geopolitical shocks are a recurring feature of global markets. While they trigger short-term volatility (and this event is more significant than most) history shows that markets are remarkably resilient over time. Political experts often frame events as existential; markets generally are not. To put data surrounding this factor, take the chart below from a report JP Morgan produced in May 2024, highlighting the fleeting reaction markets have historically had to geopolitical shocks.
The most important finding from decades of behavioral finance research is that the biggest risk during crises is not the market decline itself, but the decisions investors make in response to it. Panic-driven selling—capitulating into cash, missing the rebound, overtrading—has consistently been shown to be counterproductive to preserving long-term wealth. This is precisely the pattern we seek to help our clients avoid.
Consider two previous events. After the October 7, 2023 shock in Israel, Israeli equities ultimately recovered and delivered substantial gains. After COVID triggered the fastest bear market in history in March 2020, the S&P 500 recovered within five months. The pattern is not that bad things don’t happen—they do. The pattern is that investors who stay the course are rewarded for their discipline.
How We Are Positioned
Our approach is guided by principles that remain fully intact:
- We do not build portfolios around speculation or breaking news
- We diversify across asset classes, geographies, and risk factors
- We maintain exposure to real assets and strategies designed for periods of uncertainty
- We rely on governance and process—not prediction—to guide decisions
A significant part of our work involves assessing which risks require action and which do not. Events like this reinforce why a disciplined, multi-asset approach exists. Rather than trying to anticipate the outcomes of complex geopolitical transitions, we design portfolios capable of enduring a range of them.
As a firm, we lean into strategies that offer structural diversification. Private equity and private credit offer more control and less sensitivity to market sentiment and overlapping risks. We prefer to allocate to managers whose sector breadth, pacing, and global footprint provide differentiated exposure not tightly linked to any single economy, industry sector or risk factor.
We prefer incremental shifts, calibrated to client goals and tolerance for illiquidity. Early in a new risk cycle, the range of outcomes is wide, and information is incomplete. We think it’s better to acknowledge uncertainty than to act on guesswork.
What We Are Monitoring
While we do not make reactive changes, we are actively monitoring the factors that would matter for long-term capital markets assumptions:
Energy markets and Strait of Hormuz status
Oil was trading around $67–68/barrel prior to the strikes. Analysts expect a 10–15% spike at Monday’s open, with further moves dependent on the duration of shipping disruptions. Saudi Arabia and the UAE have capacity to partially offset Iranian supply, and the U.S. Strategic Petroleum Reserve remains available as a buffer.
Conflict duration and escalation trajectory
Whether this is a contained operation or a prolonged campaign will significantly affect the degree of market disruption. We are watching diplomatic signals, including the emergency UN Security Council session and OPEC+ meeting.
Broader risk-off dynamics
We expect safe-haven flows into Treasuries, gold, and the U.S. dollar. Equity markets may see 1–2% declines at the open. These are expected and, in our framework, create rebalancing opportunities rather than reasons to exit.
Softening transaction markets
While prices across private markets are not subject to the daily pricing mechanism of the public markets, increasing geopolitical risks can dampen corporate willingness to transact, leading to a temporary (or prolonged) closing of the IPO market and/or lower M&A activity. This will be a trend worth watching to ensure the path to realization (and liquidity) is not materially altered for our private market investments.
What We Ask of You
The single most important thing investors can do right now is stay the course. Your portfolio was designed for a multi-decade time horizon. It was built with the expectation that events like this would occur, not as rare anomalies, but as part of the investing landscape.
If you are feeling uneasy, that is entirely normal and understandable. We encourage everyone to reach out, not to make changes, but to talk through what you’re feeling and how your plan accounts for it. That is exactly what we are here for.
We appreciate the trust and confidence our clients place in us to navigate these volatile moments. We will continue to provide updates as the situation develops and are here to discuss what these events mean in the context of your family’s long-term plan.
About Jerrel Armstrong
Before joining IWP (now Matter) in 2021, Jerrel spent nearly three decades working in debt and equity capital markets. He has also served on several nonprofit boards. As Matter’s CIO, Jerrel is responsible for setting and overseeing the firm’s investment strategy, asset allocation, and portfolio construction across all client relationships. Jerrel graduated from Colorado College with a BA in world political economy and has an MBA from the Thunderbird School of Management. He is the proud father of three daughters and lives with his wife in Denver, Colorado, where he grew up.
About Thierry J.D. Brunel
Thierry joined Matter in 2013, bringing years of experience in family office and wealth management. He previously worked in investment research and portfolio management roles at Convergent Wealth Advisors and GenSpring Family Office. At Matter, Thierry leads the investment committee, advising families on portfolio strategy and governance. A Wake Forest University graduate, Thierry has a diverse international background. He’s active in his community, serving as an assistant coach for the John Burroughs School Varsity football team in St. Louis.
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This report is the work product of Matter Family Office. Unauthorized distribution of this material is strictly prohibited. The information in this report is deemed to be reliable but has not been independently verified. Some of the conclusions in this report are intended to be generalizations. The specific circumstances of an individual’s situation may require advice that is different from that reflected in this report. Furthermore, the advice reflected in this report is based on our opinion, and our opinion may change as new information becomes available. Nothing in this presentation should be construed as an offer to sell or a solicitation of an offer to buy any securities. You should read the prospectus or offering memo before making any investment. You are solely responsible for any decision to invest in a private offering. The investment recommendations contained in this document may not prove to be profitable, and the actual performance of any investment may not be as favorable as the expectations that are expressed in this document. There is no guarantee that the past performance of any investment will continue in the future.