Periods like this can be uncomfortable. Headlines move quickly. Markets respond just as fast. When events unfold quickly, perspective matters.
Oakworth Asset Management’s Investment Committee shared the following perspective with clients regarding recent geopolitical developments and the broader economic backdrop.
Our Thoughts on the Current Environment
First, while the situation in Iran is serious, its economy represents less than 1% of global gross domestic product.1 The broader economic concern is oil. If crude oil shipments from the Persian Gulf were disrupted for an extended period, prices could remain elevated for longer than expected. That would create pressure across the global economy.
However, markets are adaptive. Higher oil prices tend to encourage additional production. Over time, increased supply has historically helped stabilize prices once the initial shock passes.
Second, some of the recent pullback may serve a healthy purpose. Equity valuations had risen to levels many considered elevated. Periodic corrections can help reset expectations and restore balance. While no one welcomes volatility, it is a normal part of long-term investing.
It is also worth remembering that the United States is now a net exporter of energy. As such, that means higher fossil fuel prices are not as broadly detrimental to the U.S. economy as they once were.
Before this turmoil in Iran, U.S. economic data continued to reflect steady expansion, with growth in the range of approximately 2% to 2.25%.2 Interest rates have moved modestly higher this week, and the yield curve has steepened. Historically, positively sloped yield curves have tended to coincide with more stable economic backdrops than inverted ones.
What This Means for Your Portfolio
At Oakworth, we position portfolios thoughtfully, not reactively.
We remain underweight in international equities relative to blended benchmarks and many peer comparisons. We maintain broadly diversified allocations designed to spread risk across asset classes, sectors, and geographies.
Within equities, portfolios have had an overweight to the energy sector relative to the S&P 500 proxy. In fixed income, duration has generally been shorter than that of the broader bond market, which means portfolios have typically been less sensitive to changes in interest rates.
No allocation eliminates volatility. Diversification and disciplined positioning are intended to help you navigate it.
The Long-Term Perspective
Investing is a marathon, not a sprint. Periods of turbulence, while uncomfortable, are part of the journey.
Over the last several years, markets have delivered strong results. A measured pullback along the way can help moderate excesses and reduce the likelihood of more significant imbalances building over time.
Most importantly, your portfolio is built around your plan — your goals, your time horizon, and your priorities. Short-term headlines do not change long-term objectives.
Our purpose is simple: Helping People Succeed. In times like these, that means providing perspective, discipline, and steady guidance.
Chief Economist/ Chief Investment Officer, Oakworth Asset Management
Sources
- Trading Economics – Iran GDP (March 3, 2026)
- CNN Business – US Economy Slowed Sharply in the Fourth Quarter, Expanding at a Rate of just 1.4% (Feb 20, 2026)
Please note, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. The opinions expressed herein are not necessarily those of the rest of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself.
Opinions and forward-looking statements are subject to change without notice and may not come to pass. Past performance is not indicative of future results. References to market indices are for illustrative purposes only. Index performance does not reflect the deduction of fees or expenses, and individuals cannot invest directly in an index.
Political and geopolitical events are referenced for general context and do not represent a recommendation or prediction regarding any specific investment outcome.
Advisory Services, including investment management and financial planning, are offered through Oakworth Asset Management LLC a registered investment advisor and is owned by Oakworth Capital Bank, Member FDIC. Investment products and services offered via Oakworth Asset Management LLC are independent of the products and services offered by Oakworth Capital Bank, and are not FDIC insured, may lose value, have no bank guarantee, and are not insured by any federal or state government agency. Because of the ownership relationship and involvement by Oakworth Asset Management LLC associates with Oakworth Capital Bank, there exists a conflict of interest to the extent that either party recommends the services of the other. Oakworth Asset Management LLC does not provide tax or legal advice. You should consult your tax advisor, accountant, and/or attorney before making any decisions with tax or legal implications. For additional information about Oakworth Asset Management LLC, including its services and fees, visit advisorinfo.sec.gov.