The venerable Warren Buffett offered this simple maxim in a letter to Berkshire Hathaway investors in 1986:
"We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
As the conflict in the Middle East widened Monday following U.S. strikes on Iran, JPMorgan analyst Mislav Matejka published a note suggesting a similar approach.
Matejka said that the "dramatic weekend events will naturally lead to risk-off behavior...but if one is to have a time horizon longer than next days/weeks...one should be using the weakness" to add exposure to risk assets, adding that "fundamentals are positive."
Geopolitical risks aside, there is certainly a case to be made for solid fundamentals.
The economy is outperforming, the labor market has defined predictions of a rollover and the fiscal tailwind from the One Big Beautiful Bill Act is likely to support consumer spending and ease the burden of capital spending through tax breaks and aggressive depreciation schedules.
Investors are also starting to buy some of the more beaten-down names in the software sector, following a nearly 35% decline for the iShares Expanded Tech-Software Sector ETF from its late September peak.
The sector benchmark has risen more than 7.6% since last week's trough and finished just under 1.5% on Monday.
An index of the so-called Magnificent Seven tech giants is also starting to tick up, rising 0.44% on Monday thanks in part to a solid 2.9% gain for Nvidia and a 0.2% bump for Apple.
The tech-focused Nasdaq, meanwhile, ended modestly higher on the session while the S&P 500 has clawed back all of its declines since the start of Monday trading to finish four points in the green.
That said, oil prices remain firmly elevated, with Brent crude contracts for May delivery, the global pricing benchmark, some 8% higher on the day and trading just south of the $80 mark.
The Cboe Group's VIX volatility gauge is trading above the 20 point mark, as well, a level generally seen as indicative of broader investor caution, while the S&P 500 remains only 0.5% higher for the year and within touching distance of key technical levels to the downside at around 6775 points.
"A break below that level would signal a breach of the lower bound of the multi--month consolidation range and increase the risk of a retest of the November lows at 6,522 points," said Adam Turnquist, chief technical strategist at LPL Financial.
But David Bahnsen, chief investment officer at The Bahnsen Group in Newport Beach, Calif., thinks the case for stocks outside of the tech and AI "hype" are also primed for a rally.
"Investors should not fret one day of market volatility, especially since stock valuations have been elevated for some time now," he said. "Over the long-term, geopolitical events don't affect markets, and we've been through decades of instances with heightened tensions in the Middle East, and stocks continue to grind higher."
There's definitely some history behind that view.
Ryan Detrick, chief market strategist at Carson Group, notes data showing the median S&P 500 gain three months after a major market shock, including everything from the attacks on Pearl Harbor in 1940 to last year's tariff-induced chaos, is 2.7%.
Over the next 12 months, it's 7.4%, with gains occurring 65% of the time.
"After John F. Kennedy was tragically assassinated [in1963], stocks gained 23% the next 12 months, thanks in part to a strong economy," he said. "A year after the war in Iraq started in 2003, stocks were up nearly 30%, as the economy recovered from the tech bubble. More recently, after Hamas attacked Israel on Oct. 7, 2023, global stocks soared for a year, led by the Israeli stock market."
"This is a situation we are watching closely, but the bottom line is that geopolitical issues rarely become major investment issues if the economy is on a solid footing," he added.