You have probably been warned about 20 of the last two market crashes.
The most recent one failed to materialise after the US bombed Iran’s nuclear facilities on Sunday.
In Europe, the S&P iTraxx Crossover Index of credit default swaps — a measure of speculative grade credit spreads and a popular gauge of sentiment during periods of market stress — nudged just a couple of basis points wider on Monday.
Later, when Iran retaliated by firing missiles at a US miliary base in Qatar, the Brent crude oil price had its biggest one day drop for almost three years.
The market judged Iran's muted reaction to be the least bad outcome, and Brent ended up trading about 17% lower than where it had been a year ago.
Meanwhile, the chief investment officer at a global asset manager revealed that her company had on Monday evening unwound its “hedged position” to geopolitical events.
“That means we are running a good amount of risk,” she wrote on Tuesday.
Some are characterising the market’s phlegmatic demeanour in the face of a Middle East war as a new era of hypernormalisation — a term coined to describe the last decades of the Soviet Union, when everyone pretended that an unsustainable system was just fine.
This period, they argue, began after the 2008 global financial crisis, then absorbed further surreal developments with the Covid pandemic and Ukraine war.
Now the mix has been thickened by the second presidency of Donald Trump, where the chaos and mental gymnastics of trying to understand his thinking has proved exhausting.
A blunter way of putting it is that the markets have got disaster fatigue.
Geopolitical risks are notoriously difficult to quantify, making them hard to position for.
But investors would still be wise to put on hedges against tail risks, especially at a time when so many look optically cheap.
Take the Crossover, which at 300bp is still far below its highs of 450bp earlier this year. Buying protection at that price could well lead investors to thank their lucky stars later this year.
It's also worth remembering that even if events don’t catch you out, market movements often will.
Since most of the market appears insouciant, adding some protection now seems prudent — especially going into summer, when markets can be illiquid and outsized in their moves.
Markets are puzzling things. Sometimes self-evidently terrible things can't budge them. But the unexpected punch always comes in the end.