Over the past few days, the news from the Middle East has grown louder and more unsettling. The situation involving Iran has escalated, and we are seeing the usual side effects: sharper price swings, stronger opinions, and a steady stream of breaking updates.
In moments like this, it helps to separate what we know from what we cannot know.
What could happen from here
There are a few broad paths:
- Cooling down sooner than feared
Tensions ease, disruption remains limited, and confidence returns sooner than expected. - A drawn-out period (weeks)
Even without dramatic escalation, uncertainty stays elevated, energy costs remain high, and volatility lingers. - Wider spillover (lower probability, higher impact)
Further disruption to energy supply chains or regional infrastructure could keep volatility elevated for longer.
We cannot be sure which path we are on today. That is exactly why knee-jerk decisions are often costly.
What tends to benefit — and what tends to suffer
In episodes like this, performance tends to follow familiar patterns.
Often more resilient:
- Gold (a form of financial insurance when fear rises)
- Cash and high-quality bonds (stability and—more importantly—options)
Often more pressured:
- Businesses with high fuel and energy costs (airlines, transport, logistics-heavy industries)
- Companies and countries that rely heavily on imported energy
- Highly valued or highly leveraged assets (as uncertainty tends to compress valuations)
What we know — and what we don’t
One thing we know: this conflict will end. And very often, the intensity of the headlines fades before the situation fully resolves.
What we do not know is when sentiment turns—whether in days or weeks. For that reason, it is usually better not to let today’s emotion dictate long-term decisions.
The hardest part of investing is rarely intelligence. It is temperament.
How Unicorn prepares: we think two to three steps ahead
At Unicorn, we do not build portfolios for calm weather only. We build them to remain sensible when conditions change.
Our approach is simple:
- Think through the risks and opportunities that may matter years ahead
- Set a suitable asset allocation before headlines arrive
- Use high-quality assets as the building blocks
That is why, in portfolios that allow it, we maintain a meaningful role for:
- Gold, which tends to hold its value when fear rises
- Cash and high-quality bonds, which provide stability and the ability to act when others cannot
We also encourage what we call the 3-Bags Strategy—including keeping a sensible amount of “dry powder” outside the portfolio in Value Cost Averaging (VCA) funds.
If prices fall sharply, we treat it as an opportunity
If this episode triggers a severe and indiscriminate decline, our instinct is not to panic, but to prepare.
We may use the opportunity to reallocate part of our cash and high-quality bonds into quality equities at more attractive prices, while advising you to deploy VCA funds steadily. A temporary decline is not the same as a permanent loss.
A personal lesson from Fukushima
The Fukushima tsunami and nuclear reactors crisis in March 2011 remain etched in my memory. In the first 3 days, the headlines were intense, and the Nikkei fell by about 18% to a low of 8,605. I remember feeling my fear rise alongside the news.
After those first 3 days, the most sensational headlines eased. Prices stabilised. Almost immediately, my fear faded—despite the fact that the real-world situation surely did not resolve overnight.
2 years later, the Nikkei was at 12,434, a 45% increase from the level 3 days into the crisis.
That episode taught me something lasting: our emotions are often moved more by headlines and price movements than by reality itself.
In closing
On this investing journey, we endeavour to be your steady captain—anticipating the weather ahead, avoiding sudden turns, and keeping enough stability and flexibility to act when opportunity appears.
If you have questions about how this affects your own portfolio, or how best to use any opportunities that may arise, please speak with your consultant.
Disclaimer and Important Notice
The information herein is published by Unicorn Financial Solutions Pte. Limited (“Unicorn”) and is for information only. This publication is intended for Unicorn and its clients or prospective clients to whom it has been delivered and may not be reproduced or transmitted to any other person without the prior permission of Unicorn. The information and opinions contained in this publication have been obtained from sources believed to be reliable but Unicorn does not make any representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose. Opinions and estimates are subject to change without notice. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment. Unicorn accepts no liability whatsoever for any direct indirect or consequential losses or damages arising from or in connection with the use or reliance of this publication or its contents. The information herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. If this publication has been distributed by electronic transmission, such as e-mail, then such transmission cannot be guaranteed to be secure or error free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. Unicorn does not accept liability for any errors or omissions in the contents of this publication, which may arise as a result of electronic transmission.
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