JPMorgan strategists have analyzed investor behavior during geopolitical shocks, drawing parallels between the current Middle East conflict and the 2022 Ukraine war. According to strategist Nikolaos Panigirtzoglou, retail investors initially showed resilience in equities when the Ukraine conflict began, avoiding selling for a month while immediately offloading bond funds.

The bank's research reveals a clear pattern in how markets respond to prolonged conflicts. After the first month, as it became apparent the war would persist and drive sustained inflation through higher energy prices, investors began selling both equity and bond funds persistently. Commodity markets mirrored the 2022 oil buying patterns, while the U.S. dollar strengthened alongside pressure on risk assets.

JPMorgan also noted recent positioning shifts, with investors pulling back from crowded momentum trades in Japanese and European equities as well as emerging markets like Korea and Taiwan. The bank suggests this historical comparison offers a useful framework for understanding how market flows may evolve during future geopolitical crises, providing valuable insights for investors navigating the current Middle East conflict.