While Robert McNamara famously during the Vietnam era referred to "the fog of war," it was actually coined by Carl von Clausewitz - referring to it as Nebel des Krieges—to describe the profound uncertainty, confusion, and incomplete information experienced during battle. Given the variables involved both in war, human interaction and economic responses to events, similarly one could refer to dealing with one's investment portfolio as having to function with "the fog of investments!"
This last Wednesday I did both a "Lunch 'n Learn" and a "Fred After Dark" Zoom broadcast to discuss primarily the topic of investing in the current climate which can be best described as groping our way in a fog. Too bad if you missed it.
However, as a follow up, one of my favorite financial columnists, Jason Zweig wrote an excellent column today on the topic and is one you should be paying attention to as the financial industry charlatans come once more out of their caves to take advantage of our foggy investment climate to pitch their various and sundry nostrums on how to not just survive, but prosper in the current climate. Regardless of how logical they all sound (has anybody ever bothered to ask: if they knew, if they really knew, why are they offering it to me, at best for a pittance?), in the end it is always the old verities and common sense that will rule the day!
How to Trade the War: Avoid Gimmicky Strategies and Overheated Assets
Investors have to fight the urge to make big moves as the war in Iran rattles markets
By
Following
March 20, 2026 5:30 am ET
"Nobody can know for sure how the war with Iran will affect investments. But I’m quite sure I know how it will affect investors.
You will be blitzed with opportunistic marketing messages from the financial industry. You’re going to be urged to keep your money safe from war and inflation—or to capitalize on them—with these funds, this asset, that industry, these AI-driven recommendations, this secret set of trading signals, these proprietary algorithms. All for a small fee, of course.
With no end to the war in sight, investors should be on the defensive—not only against the bad news the war could bring, but also against the bad ideas the financial industry will be pitching.
The assets most likely to benefit during wartime are already expensive. If you didn’t buy an umbrella while the sun was shining, that protection will cost you dearly now.
And sudden moves based on anybody’s geopolitical forecasts are a bad idea. The U.S., Iranian and other governments have themselves been surprised by many of the twists and turns of this war so far.
An “excursion” that the White House expected to lead to a quick collapse of Iran’s theocratic regime has already lasted for weeks. Leaders of states in the Persian Gulf, The Wall Street Journal reported this week, now want Iran’s military rendered incapable of further attacks.
A lot of money is already in motion.
Leading defense and aerospace stocks such as Lockheed Martin, Northrop Grumman and L3Harris Technologies are each up at least 24% in 2026.
With the price of crude oil up 67% this year, exchange-traded funds investing in energy stocks have attracted more than $7 billion in new money, according to FactSet, with $2.3 billion gushing in since the beginning of March alone.
ETFs investing in gold have attracted $1.5 billion so far this year, with broad-based commodities ETFs drawing in another $2.4 billion.
All this is based on observations so obvious they’re hard to resist: War requires weaponry, the supply of oil is being choked, fear and uncertainty inflame the demand for gold.
But the market prices of stocks and commodities have already absorbed the obvious. (my emphasis, of which I've advised)
The companies in the iShares U.S. Aerospace & Defense ETF, for instance, are trading at an average of 41.5 times their earnings over the past 12 months, more than 50% costlier than the stock market as a whole—with many near all-time-high valuations.
In 2022 and 2023, the stocks in State Street’s Energy Select Sector SDPR ETF traded at an average of eight-to-10 times earnings, according to FactSet; this week, they were valued at 22.4 times...
Gold, up 51% in the past year, remains near a record high, even after falling 12% this month.
Gold’s retreat could be a sign that the fear trade may already be partly receding. Since March 2, the first trading day after the war started, defense and aerospace ETFs have lost at least 5%.
After all, what’s about to happen next in a war is one of the hardest things in the world for investors—or policymakers—to predict."
For (hopefully) intelligent thought and discussion on topics such as the foregoing, tune in next time to our Zoom broadcast. Acquiring knowledge, information and investment enlightenment is both the best defense against our own human urges and certainly the surest path to long-term investment success!