Markets are reeling from geopolitical risks amid rising tensions in the Middle East, and we likely wouldn't have seen gains like these without gains in oil and other risk assets. For those looking to hedge against geopolitical risk, stocks are actually a great way to do that, along with oil and gold. Bank of America looked at the banks that performed best in the three and six months after major geopolitical events, such as the Iraq War and Russia's invasion of Ukraine. The investment bank found that oil has historically been the best-performing stock in the three months following major geopolitical events, with a median return of 8.3%. Gold, on the other hand, is the best geopolitical hedge six months after such an event. The commodity – considered a safe haven during times of political and economic turmoil – has posted a median return of 18.9%. At the same time, after these years, large-cap stocks have also achieved considerable gains. Their three-month and six-month median returns were 4.6% and 4.9%, respectively. “In recent years, geopolitical events have not been bearish for risk assets, and arguably quite the opposite,” analyst Michael Hartnett wrote in a note Thursday. “Investors expect “Any negative hit to consumer and business confidence will be quickly offset by monetary and fiscal policy. “This is not over yet. Traders are now waiting to see whether Israel will carry out retaliatory strikes on Iranian crude facilities, which could cause oil prices to surge further. Crude oil prices have risen nearly 9% this week. “Any risk-off gains in oil prices are likely to fade once tensions in the Middle East peak and the biggest relative winner from falling geopolitical risk premiums (Russia-Ukraine, China-Taiwan have fallen) is, in our view, international equities,” Harnett also said.