Global markets and interest rates broadly finished November close to where they started, masking some volatility over the course of the month. The Canadian dollar weakened against its U.S. counterpart in sympathy with commodity prices.

It has been almost 30 years since Francis Fukuyama’s essay ‘The End of History?’ put forward the thesis that the end of the Cold War and the victory of Western liberal democracy heralded a much less eventful era for geopolitics. While that seemed like a reasonable expectation as the Berlin Wall was dismantled in 1989, anyone who has been paying the remotest attention in recent years would conclude that it has turned out to be a rosy tinted forecast indeed.

Recent months have seen events happen around the world that underline how fortunate so many of us are to live our lives in relative peace and harmony. Nobody knows what the future will bring, but how should we as investors consider the impact of what we will term ‘crisis events’ on our portfolios? While the human impact is all too real, and it is reasonable to expect an economic impact to shaken consumer confidence, what does this mean for markets?

The evidence strongly suggests the financial market impact of ‘crisis events’ is fleeting and largely a short-term reaction to headlines rolling across the screen. A study by Ned Davis Research looked at a sample of 50 crisis events dating back to 1907 and stemming from both financial and geopolitical developments in order to measure the immediate and subsequent impact on the Dow Jones Industrial Average Index. The study found a mean loss of 6.8% in the immediate aftermath of the event, but what about the long term?

The study showed that despite immediate losses, the markets showed mean gains of 3.7%, 5.2%, 9.0% and 14% over the subsequent 22, 63, 126 and 253 days respectively. The three events with the biggest market impacts (the 1907 collapse of Knickerbocker Trust, the 1929 Crash and Black Monday in 1987) were all financial in nature and by definition therefore associated with substantial market losses. However even in these cases, the index produced positive returns in all of the subsequent periods measured and recouped a substantial portion of those immediate losses. The biggest loss after 253 days (38.1%) occurred following the collapse of Bear Stearns in 2008; a period where events in the financial sector were unfolding at rapid speed and with cumulative impact.

So in the face of crisis events what should we do as investors? We are all human and understandably experience human emotions upon reading the headlines after major world events. Tempting as it might be, the evidence strongly suggests that reacting to any immediate market movements is not the right course of action – a welcome reminder to maintain a long-term view as we start to look ahead to what 2016 might have to offer.