Recent escalation between the United States and Iran has led to some short-term market volatility, largely driven by uncertainty and rising oil prices tied to disruptions in the Strait of Hormuz.
While the headlines feel significant, this type of market reaction is very typical. In past events such as the Gulf War, 9/11, and Russia’s invasion of Ukraine, markets have gone through a period of short term volatility before settling as more clarity emerges.
We have already seen some very strong rally days mixed in with the volatility. To make sure you benefit from those positive days, staying invested is key.
There has also been a lot of conversation around technology stocks and the growth of artificial intelligence, with some investors questioning whether we are in a bubble. The view from many portfolio managers and analysts is that we are not. While valuations in parts of the tech sector are elevated, they remain well below the levels seen during the dot-com bubble. Have a look at this chart which shows that today’s environment is supported by stronger earnings, cash flow, and more established business models than what we saw in the early 2000s.
| Top 7 stock valuation comparison, dot-com vs. AI eras | |
|---|---|
| 1999 price-to-earnings peaks | December 2025 price-to-earnings peaks |
| Microsoft – 66 Lucent – 48 Cisco – 97 Oracle – 92 Dell – 50 Sun Microsystems – 75 Intel – 31 Average: 65.6 | Apple – 32 Microsoft – 28 Alphabet – 28 Amazon – 29 NVIDIA – 25 Meta – 22 Broadcom – 32 Average: 28 |
Source: FactSet and Fidelity Investments, as of December 31, 2025.
This is a good reminder of the value of staying disciplined. The portfolio managers behind the mutual funds we use are actively monitoring the situation and adjusting where needed, with a focus on managing risk and taking advantage of opportunities that can come from these environments.
The key message is that short term volatility is a normal part of investing, and staying focused on your individualized, long-term plan continues to be the best approach. If anything has changed in your life to warrant a discussion, I am here to support that conversation.
The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This blog was prepared by Amanda Ashwood, for the benefit of Amanda Ashwood, Financial Planner with Crawford Ashwood Financial, a registered trade name with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this blog comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities. Mutual Funds are offered through Investia Financial Services Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Fund Fact sheet or prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.
You’re doing a great job , thank you