Let me tell you about a few specific moments when pulling your money out of the market seemed like the only rational decision. March 2020, when a global pandemic was shutting down the world economy and the S&P 500 was in freefall. October 2008, when major financial institutions were failing and economists were genuinely unsure whether the banking system would survive. September 2001, when the world felt fundamentally altered and uncertainty about the future was at levels most people had never experienced. In each of those moments, the people who sold their investments and waited for things to stabilize locked in losses. The people who held, or who bought more, were rewarded within a time frame that felt impossibly short given how dark the outlook was at the time.
We are not at a 2008 or 2020 level of crisis. But the current environment, a hot war in the Middle East involving U.S. forces, a tariff regime that has added meaningful costs to imported goods, rate uncertainty driven by a contested Fed chair nomination, and geopolitical tension touching multiple regions simultaneously, is real enough to make the question worth answering honestly. Should you be repositioning your portfolio right now based on the news? Should you be pulling back on your investment contributions while things are this volatile? The data has a clear answer. Most of the time, the answer is no.
The reason the data is so clear is the nature of market recoveries. The biggest single-day gains in stock market history cluster around the periods of deepest uncertainty and highest volatility. If you are out of the market on those days, the compounding math of your long-term returns changes materially. J.P. Morgan's asset management team has run this analysis repeatedly in different forms: an investor who missed the ten best trading days of the S&P 500 over the past two decades ended up with roughly half the return of an investor who stayed fully invested. Missing just those ten days, out of thousands of trading days. The market's recovery moments do not announce themselves. They arrive inside the worst-feeling periods, and they arrive fast.
The psychological problem with staying invested through volatility is that the story the news tells and the story the market tells are different stories with different timelines. The news story of any given geopolitical crisis is measured in days and weeks: escalation, de-escalation, setback, breakthrough. The market story is measured in years and decades. If Iran fully resumes conflict and oil spikes to $110 a barrel, that is a real economic disruption. It is not a 2008. It is not going to unwind the fundamentals of American companies generating revenue from products and services the global economy actually demands. The market may reprice that risk over weeks. The fundamentals that drove equity returns over the prior decade did not change.
There is an important distinction between tactical adjustments and panic selling that is worth being honest about. If your portfolio is over-concentrated in energy-importing industries that have direct exposure to oil cost increases, a tactical rebalancing toward less exposed sectors is not panic. It is risk management grounded in a real analysis of your actual holdings. If your allocation between stocks and bonds has drifted significantly from your target due to the recent equity rally, rebalancing back toward your target is not selling in fear. It is maintaining a deliberate strategy. What is different from those calculated moves is looking at the news, feeling anxious, and selling diversified long-term holdings because the headlines are bad. That is not strategy. It is emotion in the guise of strategy.
The investors who will look back on 2026 the way seasoned investors look back on 2020 are the ones who held their positions or added to them during the weeks when the news made that feel reckless. The market does not reward the people who were right about the crisis. It rewards the people who stayed in the game long enough to participate in the recovery. These are different things, and the difference compounds over time into dramatically different financial outcomes. The case for staying in is not that nothing bad will happen. Something bad might happen. The case is that your ability to predict exactly what happens and exactly when the recovery begins is essentially zero, and the cost of being wrong about the timing is much higher than the cost of riding through the volatility.
One final consideration that belongs in any honest conversation about this: your time horizon matters more than almost anything else. If you need your invested money in two years, the Iran situation is relevant to your near-term strategy in a way it is not for money you are not touching for twenty years. Know what the money is for and when you will need it. Keep the money you need soon in instruments that protect it from short-term volatility. Keep the money building your long-term wealth in a diversified equity strategy and let it do the work it was designed to do. This has always been the answer. The headlines change. The math does not.