The Iran War Is Practically Over, Yardeni Says

"Have some gold in your portfolio." Despite his bullishness on stocks and dismissal of the war threat, he advocates for gold as a permanent diversifier, likely due to the "sticky inflation" he mentioned regarding the PPI (Producer Price Index). LONG gold as a portfolio hedge. Real interest rates rising significantly, which increases the opportunity cost of holding non-yielding assets like gold.

Yardeni states, "If this thing gets resolved fairly rapidly, as I expect, the straits will be open and the price of oil will come down rather rapidly." He notes the Iranian Navy is "already sunk." The current oil price likely includes a "war premium" based on fears of a Strait of Hormuz closure. If the naval threat is removed and shipping normalizes, that premium evaporates immediately. SHORT oil exposure (via USO) to capture the downside mean reversion as geopolitical fear subsides. Escalation involving ground troops or hidden Iranian missile capabilities that successfully close the Strait for a prolonged period.

"Geopolitical crises present buying opportunities... stay invested in the stock market." He adds that the market is looking forward to "increased stability in the Middle East" and potentially more Abraham Accords. The market has already "bought the dip." The thesis is that the conflict is a short-term noise event, not a 1970s-style structural shock. Therefore, broad equity exposure captures the relief rally as stability returns. LONG broad equities. A wider regional war drawing in major superpowers, causing a sustained market sell-off.

"I don't think you're going to get much in the way of capital gains... Treasuries, in other words, are where they should be." He suggests the Fed may not cut rates because the economy is strong. If yields remain range-bound (4.0% - 4.5%) and rate cuts are off the table, long-duration bonds offer no price appreciation potential. Investors are strictly "earning the coupon." NEUTRAL on price action. (Hold for income, but do not buy for a trade). The economy crashes unexpectedly, forcing the Fed to cut rates aggressively (bullish for bonds).