"Life During Wartime" Written by David Byrne, performed by Widespread Panic

(Listen/watch at the link above for full effect)

"Life During Wartime" is a rock anthem by David Byrne, written in 1979 about life in a chaotic U.S. city. More than 40 years later, its message still strikes a chord. The themes of fear, conflict, and uncertainty are not only timeless, they are a part of investing.

We’re often asked: “How do you invest in this uncertain environment?”

The truth is: uncertainty has always been part of the deal. It may feel unique today — with tariffs, global conflict, and political instability — but history tells us that this is just another version of wartime investing.

"This ain’t no party

This ain’t no disco

This ain’t no fooling around…"

Why the Market Pulled Back

The recent 10% correction in the S&P 500 caught attention, but it followed a +20% gain in each of the prior two years. Tariffs may have been the spark, but the real fuel was overextended valuations and crowded trades. Investors piled into the same names, and when the momentum stalled, selling followed. 

We’ve seen this pattern before. Remember the 10% dip in 2023? It ended by Halloween and the market rallied to finish the year +24%. Market cycles always include corrections, but will this recent correction lead to the feared recession and larger declines in stocks?

The “R” Word

There’s chatter again about a potential recession. Our view: the economy has been experiencing “rolling recessions” — slowdowns that hit specific sectors at different times, not the whole system. 

We’re not saying a broader recession is impossible. But as of now, key recession signals like credit stress and widespread job losses are absent. In fact:

• 96% of Americans who want jobs have them. (US Bureau of Labor Statistics 4.1% unemployment rate.)
• There are still over 7 million job openings. (Us Bureau of Labor Statistics.)
• AI-related investment remains robust.

Further, the Federal Reserve is cutting interest rates, inflation is cooling, and tariffs, while a risk, haven’t caused a spike in prices yet.

How to Invest During Wartime

Here are the principles we believe matter most right now:

1. Know Your History -  Markets are volatile by nature. A 10% drop is not unusual — in fact, it’s the median annual drawdown over the last 40 years. Expect volatility. Don’t panic. Readers of our Lear-end letter titled “What Do You See?” will recall we stated the probability of a 5-10% decline was high. Thus, we entered the year defensive with large cash holdings.  
2. Watch for Real Signals - The fear of a 30–50% market drop is real — but that doesn’t mean it’s justified right now. We’re monitoring indicators, but the data doesn’t currently show signs of a deep downturn or recession.  
3. Be Nimble and Flexible - As details around tariffs become clearer, we’ll adjust. If inflation rises, we’ll rotate into inflation-resilient assets. Facts first, then decisions.  
4. Think Independently - Consensus narratives are often wrong or already priced in. Don’t let political bias cloud your thinking. Whether you agree or disagree with current policy, investment decisions should be driven by data and fundamentals.  
5. Don’t Just Own “The Market” - Tariffs won’t affect all companies equally. Some may even benefit. This is not the time for passive index exposure. It’s time to be selective — understand what you own and why.  
6. Look for Opportunity - Many quality stocks are down 20–30% from their highs. In areas like technology and energy, we’re seeing compelling valuations. This is when selective buying pays off.  

In Summary

This correction was driven by stretched valuations and crowded positioning, not just tariffs. The chaos in Washington adds noise, but we don’t yet see signs of economic collapse.

We don’t pretend to know exactly when the next recession will hit — or if it will. But we do know how to navigate wartime conditions. This is when experience matters most.

We prepare for war. We pray for peace. And we stay ready. Because the truth is, the coast is rarely all clear for investors. Every era feels like the most uncertain, but with clear thinking, historical perspective, and selective action, there is opportunity to be found.

"You make me shiver, I feel so tender

We make a pretty good team

Don't get exhausted, I'll do some driving

You ought to get you some sleep"

And on that note, sleep tight tonight because we have a plan for navigating the chaos.

Lear Investment Management (“LIM”) is a Registered Investment Advisor based in Dallas, Texas and registered with the Securities and Exchange Commission. Registration does not imply a certain level of skills or training. This content is for informational purposes only, contains the observations and opinions of LIM, is not intended to provide investment advice, and should not be relied upon for investment decisions. Past performance is no guarantee of future results and information pertaining to LIM’s processes is subject to change at any time without notice.

This document is intended for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The information contained herein is not intended to be, and should not be construed as, investment advice. The views and opinions expressed in this document are those of the authors and do not necessarily reflect the official policy or position of any SEC registered investment firm. 

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