Nicole Lapin

But even if you don't buy any of these sectors, it is really important to understand how assets move in response to world events so that you can protect yourself.

You don't have to play offense, but you do need to understand how to play defense.

Okay, so now here's what goes down.

Travel stocks.

On Monday, airlines and travel stocks got hammered.

Middle East airspace is effectively closed.

Routes are being rerouted and consumer anxiety about travel in wartime environments is absolutely real.

Cruise lines, hotel chains and tourism exposed stocks all sold off.

And I will tell you from 25 years covering business news, it is not uncommon to see the stock market as a whole fall when there's conflict abroad.

The S&P 500 opened sharply lower on Monday morning, but it did not sink as low as you might expect.

Interestingly, it recovered almost entirely by the time the market closed.

The S&P 500 ended Monday basically flat.

The Nasdaq actually ended up slightly higher.

What happened here was that investors bought the dip, particularly in cash-rich tech names like Nvidia and Microsoft, which historically hold their value much better than most in conflict-driven sell-offs.

Here's the broader historical pattern worth really understanding.

Markets almost always overreact to geopolitical events in the short term and then recover.

Here's the thing.

Markets always, always, always recover.

We just don't know exactly when.

So an uptick in oil stocks, an uptick in defense and gold and a dip in travel stocks are all really predictable trends when the war escalates in the Middle East.