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During the Napoleonic Wars, British financier Nathan Mayer Rothschild allegedly said: "Buy on the sound of cannons, sell on the sound of trumpets." This has become a legendary contrarian investing maxim. It suggests you should buy stocks when war or panic causes markets to plummet ("cannons"), and sell to lock in profits when peace returns and market euphoria sets in ("trumpets").
The maxim seems to be working again. The latest Gulf War started on February 28. It ended on April 8, when the US and Iran signed a Memorandum of Understanding. The S&P 500 tumbled during March, but bottomed on March 30. That selloff provided lots of great buying opportunities. The index rose to a record high on June 2.
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