Every time stress emerges in the financial markets, one question weighs on most investors’ minds: how can you build a portfolio able to withstand crises?

While markets were already trying to absorb several successive shocks—Covid, the war in Ukraine, inflation, and trade tariffs—the renewed tensions between Iran and Israel/the United States have added yet another layer of uncertainty.

In this specific geopolitical and economic environment, which strategy should you adopt to build a resilient portfolio and seize the opportunities that arise when markets become more volatile?

Bonds: prioritizing quality and flexibility

When it comes to the bond allocation, government bonds from low‑debt countries and commodity exporters continue to play an important role in a well‑diversified portfolio.

More specifically, inflation‑linked government bonds offer protection against inflation risk.

Another part of the fixed‑income allocation can be invested in investment‑grade corporate bonds (ratings BBB or higher).

Regarding currencies, a measured exposure to the US dollar remains relevant. Beyond the dollar and the euro, currencies such as the Norwegian krone and the Australian dollar also deserve a place in a well‑constructed allocation.
Maintaining an average portfolio duration below four years helps limit sensitivity to interest‑rate movements and keeps room for opportunistic adjustments. Should yields rise due to a prolonged geopolitical shock, the ability to extend duration to capture more attractive levels would be immediate.

Geographically, dynamics vary significantly. In the United States, the gradual easing of inflation has allowed 10‑year yields to fall back toward 4%, fuelling hopes of monetary easing.

In Europe, German yields have remained more stable, reflecting more anchored inflation expectations.
Amid this overall uncertainty, certain AAA‑rated sovereign bonds — Australia, Norway, Singapore — continue to act as safe havens. Despite the pressure that the conflict could exert on American and German public finances, several analysts believe that today’s central‑bank tools (QE, very short‑term funding, even forms of financial repression) significantly reduce the likelihood of a sovereign default.

Inflation back in the spotlight

Rising energy prices — closely linked to Brent crude — remind us that inflation remains the number‑one enemy of investors.
In this context, inflation‑linked bonds retain their full relevance: a significant allocation provides powerful protection in an environment where an energy, geopolitical, or logistical shock can quickly push inflation expectations higher.

Corporate credit: optimism remains surprisingly robust. Despite current tensions, credit spreads remain surprisingly contained. Companies with strong balance sheets still benefit from attractive conditions, although caution is warranted for highly indebted companies or those dependent on external financing.
Recent disruptions show that vulnerability primarily affects businesses with weak cash‑generation capacity — a critical point now that the cost of capital is normalizing.

Equity markets enter a new phase

In equity markets, the dominance of the “Magnificent Seven” seen in recent years is giving way to a more widespread performance:

• The equal‑weighted MSCI World Index is outperforming its market‑cap‑weighted counterpart.
• Non‑US markets have caught up significantly in recent months.

Tech mega‑caps still enjoy strong momentum, but their massive investments in energy‑intensive infrastructure raise new questions. The capital‑intensity of AI is reshaping their operating models while heightening risks related to the future relevance of these infrastructures.

Meanwhile, some sectors that had long been undervalued — such as European banks — are benefiting from a re‑rating partly driven by early productivity gains linked to AI.

Energy, commodities and supply constraints: persistent structural pressures

The strong contribution of the mining and energy sectors since 2025 highlights their central role in market equilibrium. The return of major geopolitical risk reinforces an already-visible reality: energy has once again become a bottleneck, amplified by the colossal needs of AI and the continued fragility of certain supply chains.

The oil futures curve currently shows a marked contango, interpreted by many as a sign that the market expects a temporary shock rather than a long‑lasting disruption.

Free Cash Flow and financial strength: the two most reliable anchors

Recent episodes — from the health crisis to geopolitical volatility — have confirmed that companies generating high free cash flow and possessing strong balance sheets are significantly more resilient to shocks.
Conversely, firms dependent on external financing or with high leverage face increased stress in today’s environment.

Alternative markets: time for a reality check

Bitcoin’s dramatic pullback — returning to levels from five years ago despite rising equity markets over the same period — illustrates the fragility of some alternative assets. Cryptocurrencies often show a strong positive correlation with high‑beta tech stocks, amplifying market movements with gains or losses three to five times more pronounced than traditional indices during risk‑on and risk‑off phases.

Private equity is also facing tighter financial conditions and growing doubts over certain valuations. As some fundraising rounds still occur at elevated prices, the gap between private valuations and economic reality raises questions.

Are private markets approaching a turning point?

The most significant recent disruption may be unfolding far from public markets: within private markets (Private Equity).

This opaque and lightly regulated segment has been experiencing a form of accelerated “decompression” for several quarters.

Unlike public markets — where price discovery is continuous — private assets rely on discretionary valuations, sometimes disconnected from real conditions. Their growing presence in products intended for retail investors (unit‑linked policies, semi‑liquid funds, feeder funds) is creating a paradox: structurally illiquid instruments ending up in portfolios expected to offer regular liquidity.

The consequences are now visible:

• redemption requests that cannot be met,
• valuations adjusted too late,
• increased risk of errors — or even misconduct — in a segment lacking transparency.

Several observers see this as a form of “2008 redux,” not through mortgage securitization this time, but through private credit and, likely soon, parts of private equity.

While this correction is not — for now — systemic, normalization may take time. And current geopolitical tensions will do little to stabilize this already‑weakened segment.

Conclusion : between risks and resilience

Overall, investors now operate in an environment where:

• a major geopolitical shock could prolong volatility,
• prolonged stress in private markets could prove contagious,
• but strong fundamentals (cash flow, solid balance sheets, diversification) can absorb part of the turbulence.

Recent history shows that most geopolitical crises dissipate relatively quickly in the markets — with notable exceptions being world wars and deep economic crises.

This is precisely why a rigorous portfolio construction — anchored in quality, liquidity, and true diversification — is so essential.

Does this resonate with you?

Every portfolio deserves a tailored approach, calibrated to your goals, your time horizon, and your risk tolerance.