How War Affects Your Investments: Lessons From February 24, 2022
When Russia invaded Ukraine, markets repriced in weeks: defense and energy up, Russia-exposed banks and utilities destroyed. The playbook, with data.
"Buy the sound of cannons, sell the sound of trumpets" is a 200-year-old market proverb. February 24, 2022 tested it in real time, and the results were brutal, fast, and very uneven.
What actually happened
Within twelve months of the invasion of Ukraine:
- Rheinmetall, Germany's largest ammunition maker, roughly +134%, and it kept going, becoming one of Europe's best-performing large stocks of the decade as rearmament budgets locked in.
- US defense primes (Lockheed Martin, Northrop Grumman) jumped ~20–25% in a year the S&P 500 fell: that relative gap is the real story.
- Energy re-rated violently: ExxonMobil ~+43%, Occidental ~+58%, as Europe scrambled to replace Russian supply.
- The losers were existential: Sberbank's London listing went to essentially zero, German utility Uniper lost ~90% and was nationalized, and European airlines and Russia-exposed banks fell 30–50%.
Our war dashboard charts the defense stocks with the invasion date marked, so you can see the repricing happen.
The pattern that repeats
Across modern conflicts, the market playbook has been consistent:
- The index dips, then recovers surprisingly fast. Broad markets have historically absorbed geopolitical shocks within months. The S&P 500's 2022 bear market owed more to inflation and rate hikes than to the war itself.
- Sector effects persist for years. A war changes government budgets, and budgets are sticky. European defense spending commitments made in 2022 were still driving order books in 2026.
- Exposure is everything. The same event that re-rated Rheinmetall destroyed Uniper. "How does war affect my investments?" has no single answer, only answers per business model.
What a long-term investor should actually do
Mostly: nothing dramatic. Panic-selling a diversified portfolio into a geopolitical headline has been a reliably bad trade for a century. The useful work is quieter: know your exposures (energy dependence, regional revenue, supply chains) before the headline, not after.
Not investment advice. Figures are approximate price changes compiled from public market data.