Investors betting on international stocks trouncing the U.S. are getting a rude awakening from the Iran conflict

The Iran conflict is delivering a 'rude awakening' to investors who had bet on international stocks outperforming U.S. equities. Geopolitical tensions, particularly in the Middle East, often lead to increased risk aversion, disproportionately impacting emerging and international markets. This situation is likely to drive capital back towards perceived safe havens, such as U.S. assets, challenging the narrative of diversification benefits and potentially causing short-term underperformance for global ex-US portfolios. Investors should monitor geopolitical developments closely for further market shifts.