When stock markets are rattled, even by war, it usually pays for investors to be patient

Key Points:

• The U.S. stock market has historically recovered from steep declines caused by crises, and experts advise investors, especially those with long-term horizons, to remain patient and avoid moving retirement savings out of stocks during volatile periods.
• The ongoing conflict in Iran has disrupted oil supplies through the Strait of Hormuz, causing oil prices to spike and potentially reach $200 per barrel if the war continues, which could increase costs for businesses and consumers broadly.
• Recent market volatility has led to a correction, with major indexes like the S&P 500, Dow Jones, and Nasdaq falling 8.7% to over 10% from their highs, accompanied by erratic swings driven by war-related uncertainties.
• Younger investors with longer timeframes are encouraged to stay invested and view downturns as buying opportunities, while older investors nearing retirement should consider reducing withdrawals to preserve their portfolios.
• Traditional safe-haven assets like Treasury bonds and gold have not performed as expected during this period due to rising yields and inflation concerns, complicating diversification strategies amid current market turmoil.