As the Iran war rages on and President Donald Trump shows no signs of calling for a ceasefire, investors are growing increasingly (and understandably) concerned about their portfolios.
Geopolitical conflicts like this almost always have some effect on stock prices. As investors see their portfolio values dip and dive, it can be tempting to pull back or change strategy to avoid major losses.
Financial expert Dave Ramsey has some blunt advice for market watchers who find themselves considering these sort of moves: Don’t do it.
“Those that ride roller coasters only get hurt if you jump off in the middle of the ride,” Ramsey told listeners on a recent episode of his radio program “The Ramsey Show.”
Dave Ramsey advises patience
Making emotional decisions about investment strategies is among the worst things you can do when it comes to growing your money, Ramsey told listeners.
“If you go back throughout history, every time there’s a burp in the geopolitical world… you’re going to see that generally what happens is there’s a one or two day, sometimes a 30 day, period of time that the market will go down,” he said. But after that initial dip, things typically return to normal.
Ramsey pointed to Covid as an example.
“The market dove when everything started sheltering in place, and everyone had to go home, and all these things had to close down,” he said. “The market dove, and it went down, and down, and down, and down. 57 days later, it was back up to where it started.”
“If you jump in or jump out every time you see a bad report on CNN or Fox, you’re never going to stay invested, and you’re never going to make any money,” he continued.
“Don’t sit and fret about what the market’s going to do based on a war.”
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Panic selling can cost investors big
Ramsey pointed out that while the market did take a dip following the first bombings of Iran on Feb. 28, 2026, it had leveled out a few weeks later.
“The market’s basically flat, as of this recording, for this year,” he reminded audiences.
Morgan Stanley Managing Director Daniel Hunt also named panic selling as the biggest mistake investors can make in a volatile market.
“Selling into a falling market ensures that you lock in your losses,” Hunt wrote in a 2025 blog post.
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“Consider that someone who stayed invested from 1980 until the end of February 2025 would have a 12% annual return, whereas someone who started at the same time, but sold after downturns and stayed out of the market until two consecutive years of positive returns, would have averaged a 10% return annually,” he continued.
“That may not sound like a huge difference, but if each investor contributed $5,000 a year, the buy-and-hold investor would have $6.1 million now; the waffler would have $3.6 million.”
Instead, Hunt recommends that investors take a long-term perspective.
“Realize that downturns ultimately are temporary,” he said. “The market may sometimes feel like it could go to zero, but market history shows that rebounds can return many portfolios to the black in just a few years.”
The bottom line for investors worried about the Iran war
Hunt’s perspective lines up with the bottom line advice Ramsey shared with his listeners.
“You should never put money in mutual funds unless you’re going to leave it alone for three to five years,” Ramsey said. “And over three to five years all of these problems that drive the market down become a distant memory, and all you will see is a trend line, overall, up.”
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“Over the next two to three years, the bombing of Iran will be a distant memory,” he continued. “It’s a much smaller blip on the radar than Covid was. Covid was a real thing in terms of what it did to the market.”
If you find yourself struggling to hold the long view, Ramsey has just one final word of wisdom: turn off the TV.
“Turn[ing] off your television is a good idea for your investing strategy,” he concluded.
Mutual fund basics
- Mutual funds are “professionally managed portfolios of stocks and/or other securities funded with a pool of capital sourced from many individual investors.”
- Mutual funds are popular because they are strategic, hands-off, and compiled by a knowledgeable professional.
- Common types of mutual funds include equity funds, bond funds, and allocation funds.
- Most mutual funds charge one or more fees to buy in.
Source: TheStreet
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