The Story the Headlines Are Missing

Yesterday morning, markets rallied based on a Trump Truth Social post suggesting the US and Iran were close to a ceasefire. By afternoon, Iran said there were no talks. Markets gave most of it back. As of the time of this writing, they're down again.

That's three moves in 24 hours based on one post and one denial.

If you made a decision in that window, sold something, bought something, moved to cash, shifted your allocation, you'd have had to be right twice. Once on the way out and once on the way back in. Almost nobody is. The research is pretty clear on that.

This is the market we're in right now. The Iran conflict has pushed oil from around $72 last fall to over $112 last week before Monday's partial pullback.¹ The Fed held rates again and still expects only one cut this year. ²Inflation is still above their target. Beneath the surface, energy stocks are up 33% this year while software is down 20%.³

The S&P 500 is down roughly 2.5% on the year.⁴ That number is doing a lot of work to hide what's actually happening underneath it.

None of that means panic is the right response. But it does mean the next few months will test how well your plan actually fits your life.

Last week, a journalist asked Federal Reserve Chair Jerome Powell directly how the Iran conflict would affect the U.S. economy. The person with more economic data at his fingertips than almost anyone on earth said, "The thing I really want to emphasize is that nobody knows. The economic effect could be bigger. They could be smaller. They could be much smaller or much bigger. We just don't know."⁵

That's not evasion. That's the most honest thing anyone in his position could say. The professionals who track global risk for a living didn't see the Iran strikes coming either. In February, only 14% of fund managers surveyed by Bank of America listed geopolitical conflict as their top concern. By March, after the attacks, 37% did.⁶ They had more research and intelligence than most of us will ever see. They were still caught off guard.

Every major bank, broadcaster, and financial commentator has an opinion right now. Where oil prices go, when the conflict ends, and what markets will do next. Before you act on any of it, it's worth knowing how reliable those opinions actually are. Until there's an endgame in sight, we're going to keep getting a rotation of headlines that whipsaw the market. One moment, the war is ending. The next it's escalating. That's not analysis. That's just noise.

Markets have been here before. Not this exact situation, but this exact feeling.

In November 2021, news of the Omicron variant hit on a Friday. Over the seven trading days that followed, you couldn't keep up with the headlines. Stocks were tumbling. Then recovering. Then sliding again.

Less than three years later, Silicon Valley Bank collapsed on a Thursday, and the same script played out. One day, the contagion looked contained. The next day it wasn’t. The day after that, nobody was sure. Markets swung hard in both directions while the story was still being written.

What you're watching right now is the same pattern. The headlines will keep coming. They will contradict each other. That's not a sign that something is uniquely broken. It's just how risk events unfold in real time.

"Forming macro opinions or listening to the macro or market predictions of others is a waste of time. Indeed, it is dangerous, because it may blur your vision of the facts that are truly important." — Warren Buffett, 2013 Berkshire Shareholders Letter

Anyone presenting you with a confident forecast right now is working with the same incomplete information as everyone else.

We hear you. “Nobody knows” can sound like a convenient way to avoid a straight answer. When markets are falling, and headlines are alarming, the instinct to act - to move to cash, reduce exposure, wait for the dust to settle - doesn't feel irrational. Doing “something” feels like taking control of the situation.

In April 2025, major Wall Street firms collectively downgraded their year-end outlook after a sharp selloff, projecting just 2% gains. Investors who followed that guidance and moved to the sidelines watched the S&P 500 recover to positive by mid-May, hit an all-time high by late June, and close the year up roughly 17%.⁷

DALBAR⁸ has measured the cost of that pattern for 30 years. The average equity investor consistently underperforms the market, not because they hold bad investments, but because they move in and out at the wrong times. They buy after confidence returns and sell after fear arrives. Over 20 years, the difference between staying invested and missing just 10 of the market's best days is the difference between crossing $1 million and landing at $460,000 on the same starting amount. Those 10 days never gave advance notice, and at the time they were not as obvious as hindsight makes them seem. History shows they arrive during the worst stretches, when everything feels like the right time to be out.

The guarantee most people are looking for doesn't exist in markets. But the cost of chasing it is well-documented.

The bigger cost isn't always what you miss on the way back up. Every reactive change resets the compounding clock, creates a taxable event, and means the next decision gets made from the same emotional place as the last one. At some point, it is no longer investing and becomes a series of reactions to headlines. No plan survives that for long.

And this is the part most people don't hear enough: we're not asking you to believe markets will recover. That's not the question we're working from. The question is whether what happened yesterday, or last week, or this month, actually changes what we mapped out together over the next three, five, or ten years. For most clients, the honest answer is no. Your retirement date didn't move. Your income needs didn't change. The goals you built this plan around are the same ones you had in January. Markets are down. That only becomes a problem for your plan if you make a decision that turns a temporary decline into a permanent one.

The pushback we hear is "but I can't afford to wait for a rebound." We understand that. And it's worth saying directly: if you're retiring in the next two or three years, or already drawing income from your portfolio, your plan should already reflect that. That's what the conversations we've had were for. A shorter time horizon means less equity exposure, more stable assets closer to when you need them, and a cash wedge already in place so you're not forced to sell anything during a stretch like this one. If that's not where your plan sits right now, that's the conversation to have. Not because the market is down, but because the plan needs to match where you actually are in your life.

What we offer, and what we stand behind, isn't a prediction. It's a process. A tax strategy that works regardless of what markets do this quarter. A withdrawal sequence built to survive a downturn without forcing you to sell at the wrong time. A portfolio matched to your actual risk tolerance, not the one you thought you had before March 2026. And an advisor relationship whose job is to be the circuit breaker between a bad week of headlines and a decision you can't take back.

Part of what makes this moment feel worse than it might actually be is where most people are getting their information. The news is not a neutral window into markets. It never has been.

Two economists at the University of Mannheim⁹ found something worth knowing. Between 2017 and 2024, Germany's DAX index rose 75%. On the days it was covered by Germany's most-watched nightly news, it dropped an average of ten points. An actual 75% gain became a 50% loss in the news version, over the same seven years. Same pattern across every major index they studied, including the Dow Jones and FTSE 100. Markets grind up slowly and fall fast. A program covering only the most significant days makes the market look like it's in perpetual decline, even in rising years.

The market as reported and the market as it actually performed were two entirely different stories, covering the same seven years.

The reason isn't journalist bias. Markets are mathematically asymmetric - bad days tend to be bigger than good days. A news programme that simply covered the most significant days would make the market look like it was in perpetual decline, even in years when it was rising steadily.

RBC¹⁰ studied 20 major military conflicts since World War II. The S&P 500 fell an average of just 6% from the start of each conflict to its lowest point. We're currently down approximately 5% from January's high. The critical variable has never been whether a conflict breaks out. It's whether lasting damage is done to the underlying economy.

It may get worse before it gets better. We're not going to tell you otherwise, and anyone who tells you they know where the bottom is should be viewed with the same skepticism we applied to the forecasters earlier in this letter. History tells us that markets in conflict-driven selloffs often have more than one leg down before they find their footing. That's normal. It's uncomfortable, but it's normal.

What history also tells us is that markets almost always bottom before the all-clear is sounded. Recovery arrives before the war ends, before oil prices settle, before any headline confirms the worst is over. We're not calling a bottom. Nobody can. What we're saying is that the investors who waited for certainty before getting back in have historically found they waited too long and missed the days that mattered most. You won't know the bottom until it's already behind you. That's not a reason to panic. It's a reason to have a plan that doesn't require you to know where the bottom is.

Your mortgage renewal: We don't arrange mortgages, but if yours is coming up, talk to us before you sign anything. A higher monthly payment changes your cash flow, and cash flow changes everything downstream. We can model different renewal scenarios against your broader plan so you see what each option actually costs over time, not just the rate. We have a trusted network of mortgage professionals who can shop the market on your behalf. The mortgage is their job. Making sure it fits the rest of your life is ours.

Your investment withdrawals: If you're drawing down assets, the order in which you sell matters as much as what you sell. Sequence of returns: withdrawing from a portfolio during a downturn locks in losses and shrinks the base that needs to recover.

One way we address this is by building a “cash wedge” into your plan. A short-term reserve of one to two years of planned withdrawals held outside your investment portfolio. When markets drop, you draw from that buffer instead of selling investments at a loss. It gives your portfolio time to recover while giving you the income you need without forcing a decision you can't reverse.

We're not suggesting a prolonged downturn is the most likely outcome. But knowing your plan holds up in that scenario is what lets you sleep through a bad month rather than react to it.

Your honest risk tolerance: If the past few weeks have changed how you feel about risk, not as a passing reaction, but as something that feels more permanent, say so. A portfolio only works if you can hold it through what we're experiencing right now. If you can't, the answer isn't to sell. It's to build something you can genuinely live with.

The story the headlines are missing is this: nobody knows what comes next - and the right financial plan was never supposed to depend on anyone knowing.

There's a difference between staying invested because you're hoping it works out and staying invested because you've looked at the plan, confirmed it was built for periods like this, and made a deliberate decision to trust it. There's a version of staying invested that's just crossing your fingers. That's not what we're talking about.

If none of the above applies to you, your plan is doing exactly what it was supposed to. Sit back and let it work.

This document is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed.All investments involve risk, including the potential loss of principal. Leveraged ETFs and other complex investment vehicles may not be suitable for all investors and should only be used with a full understanding of their risks. Asset class performance varies over time, and diversification does not ensure a profit or protect against a loss. Every effort has been made to ensure that the material contained in this document is accurate at the time of publication. Market conditions may change which may impact the information contained in this document. All charts and illustrations in this document are for illustrative purposes only. They are not intended to predict or project investment results. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. The opinions expressed in the communication are solely those of the author(s) and are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. Mutual funds and other securities are offered through De Thomas Wealth Management, a mutual fund dealer registered in each province in which it conducts business and a member of the Canadian Investment Regulatory Organization (CIRO).