War and Inner Peace
In response, Iran blockaded the Strait of Hormuz, a vital passage for fossil fuels and other economic essentials.3 Since then, oil and gas prices have gone up and, despite ongoing diplomatic talks, analysts and investors are preparing for a protracted conflict with, perhaps, a large economic impact.
Mark T. Johnsen, our CEO, has in the past discussed similar market environments. He observed that, when our personal safety and financial safety feel at risk, our fears feel especially bad. I believe today qualifies. Thus, I’d like to relate a story regarding the last time I felt personally and financially vulnerable, and how that might give us some perspective today.
Go back to the summer of 2020. For those who don’t remember (or have tried to forget), the world was still in the early stages of the COVID pandemic. Vaccines were months away, forcing us to shelter at home and mask up outside. Fear and distrust were palpable. Even worse, a wave of wildfires swept across the Bay Area. People evacuated, homes burned, and the air felt thick, tasting of smoke and soot and dust. My home was in the path of one of the largest fires.
The first thing I did was call Allstate and ask if we could up our fire insurance. When we purchased our home, we bought enough insurance to cover the mortgage if the house burned down. We’d lose our down payment, but that’s all. But after living in the home for several years, we paid down the mortgage and the home appreciated in value. Our home had turned into a significant asset. One we were at risk of losing with our then-current amount of insurance. Long story short: my insurance agent laughed out loud. Turns out the time to buy insurance isn’t weeks or days before you need it.
We also jumped on Airbnb to find alternate housing if we needed to evacuate. Our younger daughter is disabled and medically fragile, so we can’t really pack up and move just anywhere on short notice. We found a suitable home, if I recall correctly, in western Nevada. Far enough away but close enough that we could manage the trip with our children, some medical equipment, and a small dog.
Unfortunately, the fires spread so that travelling East to Nevada may not have been feasible. We then found an additional place in Oregon and secured a third haven in the Palm Springs area with my in-laws. Renting multiple homes was an expensive endeavor, but it provided me great comfort as the evacuation area edged toward our neighborhood.
The California Department of Forestry and Fire Protection (Cal Fire) has an excellent website. Cal Fire provides real-time updates on Bay-Area fires and local air quality. Soon, I found myself hitting “refresh” on the website every minute or two, watching to see if the fire graphic moved a single pixel. Checking the Cal Fire site became almost compulsive. Unfortunately, it didn’t make me feel better. In fact, I got anxious every time I clicked. Worse, the whole endeavor was unnecessary: we would have received an emergency evacuation notice instantly via text message.
Looking back, it’s obvious I feared for my family’s safety and felt like everything around me was spiraling. Thus, I sought ways to feel as though I had control. Turns out that’s a natural human reaction. According to a very thoughtful article in Psychology Today, “[w]e like believing that we can prevent bad things from happening to us and our loved ones. Feeling in control makes us feel safe.” 4 The article notes, however, that “[w]e fool ourselves into thinking we can control much more than we really can.” In fact, “[w]e can’t control other people or situations.” Instead, the author recommends focusing on “a small sphere of control consisting mainly of our thoughts and action.”
Clearly, I did not gain control over the wildfires by spending more time thinking about them. Or by keeping the Cal Fire site open throughout the day. The fires either would or would not come to our home, and there wasn’t anything I could do to stop them. Perhaps if, at the time, I had the presence of mind to acknowledge such, I could have spared myself a great deal of worry and sleepless nights.
In contrast, I still feel good about our decision to book multiple rental homes. Even though we didn’t evacuate, I don’t believe the money was wasted. Instead, I view it as a type of insurance policy. In a worst-case scenario, where we needed to leave home quickly, the rentals and the optionality would have been extremely helpful. Perhaps as important, planning ahead by securing the rentals brought me much comfort during a difficult time.
I believe my experience is relevant to investing today. Based on our last two investment webinars, and my conversations with clients, many people feel insecure. The combination of domestic unrest, war abroad, and a potential energy crisis has us feeling worried – as investors and as people.
That worry, in my view, leads us to find ways to exercise control. As Psychology Today explains, we can do that in constructive ways, or less-than-constructive ways. We have received many questions that amount to predicting the future: How high will oil go? What happens if the Iran war drags on for months or years? Should we sell stocks? Should we buy stocks?
On one hand, we’re more than happy to explain how markets might react given a range of outcomes. That’s part of our job as advisors. On the other, we truly don’t know what will happen. Just like COVID and the 2020 fires, we can’t affect the outcome of the war, or any global event. And like my Cal Fire “obsession,” we often don’t benefit from focusing on the very things that upset us.
What we can do, however, is plan. Hopefully, my experience with fire insurance can act as a cautionary tale. It’s never too early to plan. By the time we realize we might need insurance, for example, it may be too late. Ironically, the best time to plan for contingencies is when things feel relatively safe. We can – with an advisor’s help – dispassionately examine our needs and create a plan to address them. Most often, that means affirming our portfolios remain aligned with our long-term goals and ensuring we have enough short-term liquidity to manage difficult times.
Moreover, we can remind ourselves that obsessing about the future won’t change it. It’s not easy, but if we can focus on the things within our control, we are most likely going to feel better.
Finally, we can acknowledge that there is no gain without risk. On a lark, I used AI to search for the “safest” city in the United States. Apparently that city is Duluth, Minnesota. Duluth residents face the lowest chance of harm due to natural disasters.
With all due respect to my fellow Mid-Westerners, I don’t want to live in Duluth. I believe the Bay Area’s people, culture, climate, and opportunity will mean a wealthier life for me and my family. And I understand I will take some “risk” to live here. Most of us are willing to assume risk, be it environmental or market, to enrich our lives. The key is remembering that when things get hard. Let us help you do that.
[1] Global stocks represented by the MSCI ACWI Index (Net). All investment returns from Morningstar and YCharts unless otherwise noted. Past performance is no guarantee of future results.
[2] We are aware of the political debate regarding whether the military strikes constitute a “war.” That distinction is not relevant to our discussion, so we are using the descriptive phrase here.
[3] See, e.g., Butler, et al, Why the Strait of Hormuz matters so much in the Iran war, BBC.com, April 7, 2026.
[4] Martin, When Life Feels Out of Control, Focus on Yourself, PsychologyToday.com, March 5, 2023.
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