I’ve been observing something that keeps repeating in the markets: every time a major geopolitical conflict erupts, capital follows exactly the same high-level script. It’s no coincidence. In the last 36 years, we’ve seen this pattern play out in full four times, and honestly, understanding this mechanism could be your best defense in times of uncertainty.

Look, when war threatens, most people see chaos. But markets see something different: they see a machine for discounting expectations. The difference is crucial. During the preparation phase, fear dominates everything. In 1990, when Iraq invaded Kuwait, oil shot up from $20 to over $40 in just two months. The panic was real. But here’s the irony: the S&P 500 fell nearly 20% before the first shot was fired. The market was pricing in fear.

Then came January 17, 1991. Operation Desert Storm began. And something completely counterintuitive happened: oil plunged more than 30% in a single day. Why? Because uncertainty disappeared. Suddenly, the outcome was predictable. The stock market jumped, and within six months it not only recovered all losses but reached new all-time highs. This is what Wall Street calls buying to the sound of cannons.

The 2003 Iraq war followed the same high-level script. Months of diplomatic tension, markets falling constantly, capital fleeing to gold and Treasury bonds. Oil rose slowly to $40. But the absolute bottom of the U.S. stock market came a week before the war started, around March 11. When missiles really flew toward Baghdad, the market interpreted it as the bad news already being sold. Rapid recovery. Four years of bull markets. Gold cooled off. The story repeated itself.

Now, the conflict between Russia and Ukraine in 2022 was different. And that matters for you to understand. Russia controls energy and metals. Ukraine is Europe’s granary. When it erupted in February, Brent temporarily surpassed $130. Natural gas in Europe multiplied. Wheat and nickel hit all-time highs. But unlike the previous wars, this wasn’t just emotional panic. Supply chains were truly broken. The most severe inflation in 40 years hit Europe and the United States. The Federal Reserve was forced to start the most aggressive rate-hike cycle in history. The result was a rare simultaneous drop in stocks and bonds. The Nasdaq fell more than 30% that year. This was a real black swan—not just a temporary scare.

So what does all this mean for you right now? First, uncertainty is the greatest killer. The sharpest market declines almost always happen during the preparation phase, not during the actual conflict. Once the situation becomes predictable, the market bottoms out and recovers. Second, the commodities trap is real. Before the war, oil and gold rise to incredible prices on panic. But if the conflict doesn’t substantially disrupt physical supply, prices drop fast after the outbreak. Becoming the last buyer is extremely easy.

Third—and this is critical—distinguish between emotional impact and fundamental rupture. If it’s only a local conflict with an imbalance of power, the stock market recovers quickly. But if it causes a prolonged disruption to key supply chains, everything changes. Inflation and higher rates redefine the global valuation anchor. The period of pain is very prolonged.

For the cryptocurrency market, the reality is harsh. Despite the narrative of digital gold, in real geopolitical crises, behavior is more like a highly elastic Nasdaq. Institutions sell first the most liquid and riskiest assets to raise cash. Altcoins suffer from liquidity shortages. Bitcoin holds up better, but it’s not immune.

Now, if you want to protect yourself, forget about chasing high returns. Your goal should be preserving capital and defending against inflation. I would recommend this: keep 20 to 30 percent in cash and equivalents. It’s not sexy, but in a crisis, it’s your lifeline. Buy an inflation hedge with 10 to 15 percent in gold or energy ETFs. Don’t expect big gains—just coverage. Reduce marginal positions that have no gains and concentrate on broad index ETFs or leading companies with solid cash flows. Adopting index exposure is using the resilience of the entire economy against the vulnerability of a single company.

For crypto, reduce high-volatility altcoins. Keep Bitcoin as the long-term base, or swap them for dollar stablecoins on regulated platforms. When geopolitical risk eases and liquidity returns, then yes, you can allocate between 10 and 30 percent to alpha opportunities according to your tolerance.

And please, never use leverage in times of crisis. Geopolitics changes rapidly. A ceasefire announcement can make oil drop 10 percent. With leverage, you could be liquidated by short-term volatility before you ever see the long-term victory. The information gap in capital markets is extremely unforgiving. When you decide to go long on escalation, quantitative institutions are usually already prepared to take profits and sell the news.

The most powerful weapon of ordinary people isn’t precise prediction. It’s common sense, patience, and a healthy overall balance sheet. The flames will eventually go out. Order is always rebuilt. At the peak of extreme panic, the most unnatural move is to stay calm. And the most dangerous move is to sell in panic. Remember the oldest proverb in investing: never bet on the end of the world, because even if you win, no one will pay you. Our greatest wish remains peace.