The four most dangerous words in investing are: ' This time it's different' 
Sir John Templeton. 

Market Update: Iran - Rising Oil Prices and What It Means for Investors

Recent geopolitical developments in the Middle East have understandably increased uncertainty in global markets this morning, particularly around oil supply/energy prices. One key shipping route—the Strait of Hormuz, which handles a significant portion of the world’s oil, is basically closed at this point.  Shipping insurers have also cancelled current policies and are requoting with a 50% increase in premiums.

While the situation is still evolving, the main economic impact so far has been through higher energy prices, which can influence inflation, interest rates, and market performance.

Key questions:

What happens to leadership in Iran now? With Khamanei and other senior leaders gone, there is now a leadership vacuum in Iran. Prior experience (Iraq, Libya, Egypt) tells us that the most likely outcome in the short-term is instability – which seldom works out to a ‘western-friendly’ democracy over the long-term.
How long will this conflict go on for? Trump casually threw out an estimate of four weeks, but regime changes are rarely clean and orderly. What’s more is that the removal of Khamanei doesn’t automatically guarantee a ‘Venezuela-esque’ situation whereby the new leadership is eager to work with the US.

Investment portfolio impacts:

Impact on inflation and interest rates
Oil prices are around 7% higher this morning.  If they remain near current levels, inflation in Canada and the U.S. could rise modestly over the coming year, putting an end to any hope of future rate cuts. However, if this conflict continues for more than 3 months, oil prices could rise to around $100 per barrel, which would increase inflation by 1%-1.3% in both countries.  This could bring Canadian inflation closer to 3.5% and US inflation to 4.5%.  These numbers will make central banks uncomfortable and I expect borrowing costs will remain elevated for longer than previously expected.

Impact on stock markets
As with any global shock to economies, there will be winners and losers.  Higher oil prices may support energy-producing countries like Canada as exporters benefit from increased revenue when prices rise.  In addition, this weekends events will like accelerate outflows from the US.

Areas that may benefit:

Energy companies and oil producers
Commodity-focused markets
Materials sectors such as mining and metals

Areas that may face pressure: 

Airlines and transportation companies
Consumer-focused businesses sensitive to higher costs 
Countries that rely heavily on imported energy

Our investment perspective
Geopolitical events can create short-term volatility, but markets historically adjust as supply responds and conditions stabilize. Importantly, diversified portfolios are designed to navigate periods like this.   At this time, we are closely monitoring developments but are not making broad changes based solely on short-term geopolitical events. Maintaining a disciplined, long-term investment approach remains the most effective strategy.