The recent upheaval in the Middle East has investors understandably on edge. With Iran and Israel’s tenuous ceasefire brokered by President Trump still fragile, the lingering threat of renewed conflict has many Americans wondering how best to safeguard their savings. The markets bounced back this week, but the underlying anxiety remains palpable: is this just a temporary reprieve, or could turmoil overseas send our portfolios crashing down once again?
If you’re feeling unsettled, you’re not alone. There’s a pervasive worry among investors—particularly those nearing retirement—that something catastrophic could wipe out years of careful financial planning. It’s natural to question whether this latest geopolitical rollercoaster demands a fundamental shift in how you manage your money. Should you rebalance your portfolio? Stock up on cash reserves? Or is this just another bump in the road that long-term investors should calmly ride out?
The truth is that investing is always fraught with uncertainty. But there are prudent steps you can—and should—take to protect yourself from chaos abroad impacting your financial future here at home. Conservative investing, diversification, and a disciplined approach remain your best defenses against global instability.
Personal finance expert JL Collins, author of the million-selling book “The Simple Path to Wealth,” reminds us of one important fact: despite unprecedented turmoil—from the pandemic to record inflation, rising interest rates, tariffs, and now Middle Eastern tensions—the S&P 500 has still delivered nearly a 13% average annual return since January 2020. “That’s incredible with all of that turmoil,” Collins told Yahoo Finance. His advice remains steadfast: stay invested, don’t panic, and maintain at least a 50% allocation to stocks, even as you approach retirement. Stocks are the growth engine that keep your portfolio healthy over the long term.
This has been a wild decade so far Collins told Yahoo Finance Were halfway through and weve gone through a pandemic and meme stocks and 9 inflation and interest rates going from zero to 5 in record time Then we had these tariffs and now whats going on in the Middle East and yet the average annual return for SP 500 from January 2020 to May 2025 has been nearly 13 Thats incredible with all of that turmoil
Yet, Diane Harris, deputy editor of Kiplinger and former editor-in-chief of Money Magazine, offers an important nuance. She argues this Middle Eastern crisis “has the potential to be substantively different,” warning investors to prepare accordingly. Harris wisely advises controlling what you can—your own financial choices. “We can’t control the economy. We can’t control whether or not there’s a war. But we can control our response,” she emphasizes.
The smartest move you can make, according to Harris? Boost your cash reserves. Cash provides stability when markets tumble and flexibility if economic conditions deteriorate. Whether you’re young or approaching retirement, holding extra cash ensures you’re never forced to sell stocks at rock-bottom prices during a downturn. It gives you peace of mind and a sense of control in turbulent times. “When you build up your cash reserves,” Harris explains, “suddenly you’ve taken control of a situation that feels out of control.”
Christine Benz, Morningstar’s director of personal finance, echoes the importance of adjusting your portfolio based on your age and proximity to retirement. Younger investors with decades ahead should remain predominantly invested in stocks, considering global diversification to mitigate regional risks. For those over 50, Benz advises gradually shifting toward bonds and other conservative assets. High-quality bonds, like U.S. Treasurys, tend to hold value or even appreciate during stock market plunges, giving older investors a critical lifeline if markets deteriorate.
The takeaway is clear: while we can’t predict geopolitical events or market reactions, we can always prepare ourselves financially. Conservative investors should build robust portfolios that weather storms—stock-heavy when young, balanced with bonds and cash as retirement nears. Regularly rebalance your investments, maintain ample cash reserves, and stay disciplined. This strategy won’t eliminate anxiety entirely, but it will ensure your financial future remains secure no matter what international turmoil comes next.
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