US-Iran War Sparks Market Jitters — But Experts Say 'Stay Invested' or Risk Missing Gains

Wall Street strategists are issuing a 'stay the course' directive to American households as the escalating US-Iran war wipes trillions from markets, warning that fleeing to cash now risks missing the inevitable 'ripper of a rally' that historically follows geopolitical shocks.

Global X head of investment strategy Scott Helfstein and Carson Group's Ryan Detrick lead a growing chorus of experts who maintain that while the 18-day conflict has sent oil past $115 and triggered a 4.2% dip in the Morningstar US Market Index, the 'biggest mistake' an investor can make is cashing out and missing the subsequent bounce.

'Geopolitical events generally lead to brief periods of heightened volatility, but markets are usually quick to recover losses and tend to move higher in the subsequent weeks,' said Helfstein.

Data from the Stock Trader's Almanac reveals that since 1979, the S&P 500 has gained an average of 2.2% in the months following major wars or energy crises, suggesting that the current 'bloodbath' on trading screens is a temporary tactical reset rather than a long-term trend reversal.

Despite the 'doomsday' headlines following the assassinations of Iran's top leadership on 17 March 2026, professional investors point to the fact that 50% of the market's best-performing days occur during bear markets, meaning those who move to the sidelines today are statistically likely to push their retirement goals back by years.

Stay The Course During Market Volatility

'Doomsday' headlines can drag down stock prices suddenly, which could lead many Americans to pull out their money, even if it's parked in a 401(k) retirement account.

The stock market fell 19% after the US announced new tariffs in early 2025. No matter how volatile the markets are, financial experts believe investors should stay the course and avoid making major portfolio changes in response to current volatility.

'Staying invested across geopolitical, economic and market disruptions is really important,' Helfstein said. 'The biggest mistake an investor can make is moving out of the market, which increases the risk of missing a bounce or new highs.'

While some investors argue they could get a bad vibe about the company and sell holdings before stock prices plunge, experts believe major losses can be avoided this way, but that is only half the battle. One must also figure out a way to get back in, and the longer your money sits idle, the bigger danger you are in of pushing back your long-term goals by years.

Hartford Funds research estimated that an investor who invested $10,000 in the S&P 500 in 1995 would have amassed $224,000 by 2024. If the same investor missed the 10 days with the highest returns over the same holding period, gains drop 54% to around $103,000. Missing the top 30 days of the stock rally over this period would have left the investor with only $38,000 by 2024. Note that 50% of the market's best days over the sample duration occurred during bear markets.

How To Deal With Difficult Market News?

When the market outlook appears bleak, experts suggest adding to your diversified portfolio, which is designed around your long-term goal.

'The stock market is the only place where things go on sale, and people run out of the store screaming,' said Carson Group strategist Ryan Detrick. 'If you have that plan ahead of time, you probably will realise these are solid companies that I can get on the cheaper right now.'

Detrick added that those who intend to hold their stock holdings for a long period and invest when prices are low are getting a good discount on the securities. This is something Warren Buffett is known for: buying great businesses at great prices over the decades.

However, it could become difficult to buy more of a stock when your existing holdings are trading deep in the red. To overcome this challenge, investors recommend investing with blinders on!

'Put yourself in a position to be paying as little attention as possible on an ongoing basis,' said Christine Benz, director at Morningstar. 'Put all those contributions on autopilot.'

'Yes, down markets are a great environment to put additional funds to work if you're in a position to do so,' Benz added. 'But I think you can really set yourself up for success by setting a decent target savings rate, getting into some sort of sane asset allocation ... and then just tuning it out.'

War Dividends: Energy And Defence Surge

Under the surface of the broader market decline, certain sectors are benefiting from the 'supply-side shock' of the Iran war. Energy stocks have emerged as the best-performing sector, gaining 5.5% since the strikes began as Brent crude tested $119. Defence contractors like Lockheed Martin and Northrop Grumman have also seen increased demand as the US military campaign enters its third week without a defined endpoint.

Strategic investors are now focusing on themes with long-term implications, such as cybersecurity and US energy infrastructure, which Helfstein believes will profit from the current disruptions. While materials and financial services have been hit hardest—down as much as 10%—the consensus among analysts is that the market's 'fear threshold' is peaking. 'The stock market is the only place where things go on sale, and people run out,' Detrick noted, urging those with long-term horizons to view the red screens as a rare opportunity to buy solid companies at a discount.

Investment Strategy: The US-Iran Conflict Playbook

The current market volatility requires a disciplined approach to avoid permanent capital loss.

• Auto-Pilot Contributions: Continue monthly 401(k) and IRA deposits to take advantage of 'dollar-cost averaging' at lower share prices.
• Sector Rotation: Monitor the 'HALO' trade (Higher-for-longer, Alternatives, Logistics, Oil) as energy and materials decouple from the broader tech-heavy indices.
• Cash Buffers: Financial planners recommend keeping at least six months of living expenses in high-yield savings to avoid being forced to sell stocks during a temporary downturn.

The strategy for the remainder of March 2026 remains focused on 'Investing with Blinders On.' By automating 401(k) contributions and ignoring the 'red screen' volatility, investors allow dollar-cost averaging to work in their favour, acquiring premium US equities at 'war-discounted' prices.

The next critical pivot point for the global economy will be the Federal Open Market Committee (FOMC) meeting to set interest rates, a move that could be the next major catalyst for a market reversal.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.