- \ Gerard Gruber
- March 19, 2026
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Oil hits $119. The Dow drops 700 points. My phone rings.It's early—maybe too early to form a complete strategy until we see how long this Iran conflict progresses and which countries get pulled in....
Oil hits $119. The Dow drops 700 points. My phone rings.
It’s early—maybe too early to form a complete strategy until we see how long this Iran conflict progresses and which countries get pulled in. But that call, that moment when a client’s voice has that edge of worry, reveals something most advisors won’t tell you: the difference between a financial plan and financial architecture becomes visible only when markets panic.
I’ve been doing this for three decades now, and I’ve watched this pattern repeat. When geopolitical shocks hit, you discover whether your planning system can maintain strategic coherence or collapses into emotional reaction. The Strait of Hormuz carries roughly 20% of global oil flows—about 20 million barrels daily. Iran’s shown they can actually disrupt that. So now we’re not just watching oil prices spike. We’re seeing hidden interdependencies between portfolio allocation, withdrawal sequencing, tax strategy, and distribution timeline that fragmented planning completely ignores.
Look, most advisors are telling clients some version of “don’t panic, stay the course.” That’s not wrong. But it’s incomplete.
The real question when my phone rings isn’t whether you should panic. It’s whether we built your planning system to function when you want to panic but shouldn’t—and whether we can distinguish between market noise and actual environmental change requiring calibration.
The Confirmation Problem Most Advisors Won’t Acknowledge
Here’s what I’m actually watching when oil spikes and markets drop: institutional money flows, not headlines.
Retail investors react to news. That’s normal. But institutions? They reposition based on structural assessment. And here’s the thing—they can’t move all at once without disrupting entire sectors, so they adjust gradually over weeks. At Harbor West, we track where capital is actually flowing. I’m comparing industry performance week to week, month to month, watching whether the smart money is making real moves or just shuffling positions.
You need confirmation before making changes. But confirmation takes time. Usually four to eight weeks minimum. Yeah, that means you might miss selling at the absolute top. You’ve got to accept that.
So there’s this tension: You can’t react to every headline, but you can’t wait so long that you miss the signal entirely. The answer isn’t timing perfection—I’m rarely successful selling at the top and buying at the bottom. The answer is building portfolios that expect correction rather than react to it.
When I tell a client “this looks like noise,” I’m not dismissing their concern. I’m saying our system was built on the assumption that markets will correct at some point, somewhere, somehow. We don’t know when. Honestly, we don’t need to know when. We need allocation designed to weather downturns without forcing you to sell at lows.
Why Cash Reserves Create a New Problem During Energy Shocks
Standard advice—and I follow this—says keep two to three years of expenses in cash reserves so you don’t have to sell during bear markets. But here’s the complication I need to discuss with clients right now:
Sustained inflation from energy shocks doesn’t just threaten your portfolio. It erodes the purchasing power of your safety buffer.
If oil stays above $100 for an extended period, you’re not just facing market volatility. You’re facing actual cost-of-living pressure. For every 10% increase in oil prices over six months, monthly CPI increases by roughly 0.11%—about 1.38% annualized.
That cash reserve protecting you from selling at market lows is simultaneously losing ground to inflation. You’re balancing two risks: sequence of returns risk versus purchasing power erosion.
The solution isn’t choosing between them. It’s what we do at Harbor West—coordinating your response across the entire system. I look for holdings tied to inflation: energy positions, commodities, companies with consistent dividend growth. We maintain that liquidity to avoid forced selling while positioning parts of the portfolio to benefit from the very pressure threatening other parts. More times than not, stocks do rise during inflationary periods. Stagflation’s different—that’s tougher. But if you can avoid selling at lows and maintain that moderate allocation between equities and fixed income, you work through the cycle without permanent damage.
And eventually? Inflation changes. People can’t afford higher costs. Demand drops. Usually a recession sets in and prices decrease. The cycle plays out. I’ve watched this happen before.
The Retirement Timeline Problem No Monte Carlo Simulation Captures
Monte Carlo simulations are built on historical return assumptions. But when you’re facing a geopolitical shock that could fundamentally alter the energy-inflation relationship for years, those simulations show you probabilities based on past patterns that may not match current structural conditions.
I still use them—they’re valuable tools. But I weight my own judgment about what’s actually happening more heavily than model outputs when the environment shifts. Because here’s what those simulations can’t fully capture: we’re potentially looking at a geopolitical shock that could fundamentally alter the energy-inflation relationship for years.
And here’s the specific problem I’m working through with clients right now: if you’re 68 and planning to retire at 70, you don’t have the luxury of waiting for “at some point” when inflation normalizes.
The timing of the cycle matters. A lot.
When clients are making that transition from work to retirement during a downward market trend or bear market cycle—it’s not the best time to retire. We talk about that directly. These are uncomfortable conversations, but necessary ones. Maybe you work an extra year or two. Maybe you transition to part-time instead of full retirement. Maybe we look at cutting spending. We examine budgeting together, budget forecasting, Monte Carlo simulations—all of it combined helps determine whether you’re positioned for successful retirement or not.
The closer you are to retirement or already in retirement, the more important protection becomes relative to growth. I want income strategies in place—we’ll talk about what that actually means in a minute. I want enough reserves to get through bear market cycles and inflationary periods without forced selling. And I need you to understand something fundamental: markets won’t go up forever. They will correct at some point, somewhere, somehow. So we build portfolios designed to weather those downturns, not react to them.
What This Iran Crisis Reveals About U.S. Energy Vulnerability
Here’s something most advisors haven’t factored into their thinking: this crisis is probably less structurally severe than past oil shocks.
Nearly 100% of domestically used oil is now produced in the U.S., compared to the 1970s when nearly 50% was imported. The economy has gradually become less vulnerable to oil supply shocks. Energy intensity has declined thanks to a more services-oriented economy, greater efficiency, and technological advances. The share of consumer spending on energy is near an all-time low.
There are alternative energy sources. There’s considerable oil available in the Western Hemisphere that wasn’t accessible during past crises. The U.S. can tap strategic reserves. Supply chains can normalize.
So you might be wondering: Gerard, why are you even considering portfolio adjustments toward energy and commodities if you believe this resolves faster than historical precedents?
Fair question. Because any disruption to oil markets creates ripple effects tied to inflation, production, distribution, gas prices, home heating costs. It takes time—weeks, months—for these to normalize even in the best-case scenario. Even if this gets corrected or modified sooner than past situations, you still have a period of elevated prices affecting purchasing power for retirees on fixed incomes.
So here’s what I’m actually doing: not making full portfolio changes. Adding gradually to specific industries—energy, natural resources, gold—while watching for trend confirmation. We have our core holdings that stay consistent. Then we have tactical positions around the edges that respond to environmental conditions. Things have already gone up so much in such a short time that you’ve got to be careful. I’m not going fully in. We’re adjusting a little, watching, and adding over time if the trend confirms.
The Behavioral Override Mechanism Most Plans Lack
When fear hits the market—especially after we’ve seen significant growth in sectors like technology—you see profit-taking. You see emotional reactions on both institutional and retail sides. Short-term traders jump on political disruptions to create volatility they can profit from.
The question isn’t whether emotion exists in markets. It does. Always.
The real question is whether your planning system has structural mechanisms to override emotional response patterns when they conflict with strategic logic. Does your advisor have protocols for this built into the relationship?
Most advisors don’t. They react to volatility while claiming strategic repositioning. They treat plans as static documents instead of dynamic systems requiring continuous calibration.
At Harbor West, I communicate with clients minimum three to four times per year. We review financial plans together. We look at whether investment strategy still aligns with financial plan. We examine—and this is important—how much you can afford to lose short-term to achieve significant long-term gains. We make adjustments when life circumstances change, because people’s lives do change, and plans need to adapt accordingly.
So when markets drop 700 points and oil spikes to $119, I’m not telling you to do nothing. I’m telling you not to react too quickly to something that could just be a blip on the screen. We have to wait to see if the disruption gets confirmed before making changes. That’s not passivity. That’s discipline that protects you from yourself.
All ships move with the tide. Even the most conservative investments experience downward movement during volatile periods. The idea is not to react to immediate disruptions but to watch for progressive disruptions that continue for more than 6 to 18 months. That’s when you move the needle.
The Income Strategy Gap in Standard Retirement Planning
One thing I think a lot of advisors don’t pay enough attention to: making sure clients have enough income during retirement through an actual income strategy.
Not just withdrawal rates from portfolios. Not just “take 4% and hope.” Actual income architecture.
I give clients options on how to devise income strategy. Some of that income gets guaranteed through annuitization—I know some people hate annuities, but used correctly they create certainty. We use municipal bonds. We position for qualified dividends from very good companies. We consider real estate income from traded REITs—but only liquid alternatives. I don’t believe in using anything illiquid.
This combination creates sustainable retirement income that works through downturns and volatile market moments. Combined with two to three years of expenses set aside, you don’t have to sell at lows. You can ride through bear markets without locking in losses.
For taxable accounts, we manage gains carefully. If a client has significant tax gains in an investment, I don’t want to disrupt that and cause capital gains taxes unnecessarily. We harvest losses year-end to offset gains when possible. We use exchange-traded funds and individual stock holdings that don’t distribute gains consistently on an annual basis—this gives us more control. With IRAs, we have more freedom to make protective adjustments when necessary because we’re not triggering immediate tax consequences.
The strategy shifts based on where you are in life. During earning years, we can be more aggressive with growth. As you transition to retirement and need income, protection becomes more important relative to growth—not exclusively protective, but the balance shifts. The allocation adjusts. The income strategy activates. And honestly, the behavioral override mechanisms matter even more because you have less time to recover from panic-driven mistakes.
What Advisors Are Getting Wrong About the Iran Situation
The biggest mistake I’m seeing right now: treating this as a portfolio problem instead of a system stress test.
Advisors are focused on rebalancing, sector rotation, tactical positioning. Look, those aren’t wrong moves. But they’re incomplete if you don’t have the underlying architecture to maintain strategic coherence when clients are calling you anxious.
A lot of what you’re seeing in headlines—Iran saying “prepare for $200 oil,” pundits predicting recession, market timing recommendations—it’s noise. When you build an investment strategy, you’re looking at when things could turn the other way. Markets won’t go up forever. They will correct. You design portfolios to weather through those downturns, not react to them.
That requires some specific things:
Long-term strategy reviewed regularly, not abandoned during volatility
Investment strategy integrated with financial plan, not operating independently
Understanding how much short-term loss you can tolerate for long-term gain
Income strategies for retirement that function during both growth and bear markets
Communication frequency that maintains alignment regardless of market conditions
The Iran conflict will eventually resolve. Oil prices will normalize—they always have historically. Markets will find equilibrium. The question isn’t whether that happens. It’s whether your planning system can maintain integrity while it happens—or whether you make emotional decisions that create permanent damage to long-term outcomes.
I’ve watched oil crises before. The 1970s shocks. The Gulf War. Russia-Ukraine just a couple years ago. They all had different structural contexts, but the pattern is remarkably consistent: disruption occurs, prices spike, markets panic, everyone predicts disaster, and eventually conditions normalize. Sometimes it takes months. Sometimes longer. But it happens.
This one might resolve faster than historical precedents because of Western Hemisphere production capacity and alternative energy sources. Or it might not. Iran controls the Strait of Hormuz—that’s a real strategic chokepoint. This conflict could last months. Tehran just named Mojtaba Khamenei as supreme leader, which some analysts think signals prolonged crisis. Nobody knows for certain how this plays out.
But here’s what I do know after three decades of this work: the advisors who help clients successfully work through this won’t be the ones making the best tactical calls on energy stocks. They’ll be the ones who built systems designed to expect correction, maintain discipline during volatility, and calibrate continuously based on confirmed environmental change rather than headline reaction.
That’s the difference between financial planning as document delivery—here’s your plan, good luck—and financial planning as ongoing architecture maintenance.
One collapses under stress. The other was built for it.