Should You Change Your Investments During a Global Crisis?

When the news is full of war, oil spikes and markets lurching around, doing nothing with your portfolio feels irresponsible. It usually isn't.

The instinct during a crisis is to do something: sell, move to cash, wait for the dust to settle. But the move that actually works is boring. Keep your short-term money safe, keep your long-term money invested and make sure your portfolio still fits your timeline and your stomach for risk. The goal isn't to guess what happens next. It's to build a plan where you don't have to.

Let's walk through how a crisis actually touches your money, and what's worth changing versus what's worth ignoring.

How does a global crisis affect your money?

A global crisis usually hits your finances indirectly, through a chain reaction rather than a direct hit. Oil is the classic example.

For a whole lot of the world, oil is a must-have. When a conflict knocks out even a little bit of supply, the price can skyrocket because the need for it doesn't really budge.

Then the chain reaction starts, and the higher cost begins to show up in places unrelated to the conflict, like the grocery store, where shipping food suddenly costs more. Higher prices mean more inflation. More inflation pushes interest rates up, and higher rates make mortgages more expensive, which cools demand for housing. 

So you've got kind of an economic mess. And that mess can go three ways: It can muddle along about the same, it can get worse or it can get better.

Why does trying to time the market usually backfire?

Market timing usually backfires no matter what’s going on in the world. But especially during a global crisis, the biggest moves tend to come when you least expect them.

One of the best days the stock market has had in years came on a surprise ceasefire announcement that almost nobody saw coming. Markets surged like crazy. Why? Because that good news simply wasn't built into them yet. If you'd gotten scared and sold the week before, you missed the whole thing.

Being out of the market for one day you should have been in, you can give up a huge chunk of your returns — often more than the most expensive advisory fee would ever cost you.

You can't predict which way a crisis breaks, so you can't predict the day it turns. That's the whole problem with stepping out and trying to time your way back in.

How should your timeline guide stocks, bonds and cash?

Your timeline should drive where your money sits, far more than any headline. The simplest version of the rule is that money you need soon doesn't belong in the stock market.

Money you'll spend in the next one to two years belongs in a safe, secure pot. A money market fund or a limited-term bond fund works. 

Let's say you put in an order for a custom giant telescope. (I don't know why anyone would want a giant telescope, that’s probably just me.) You wouldn’t want that money in stocks while you wait for the shipment to come in to pay the balance. The same goes for a second home, a kitchen renovation or a new car. If you need the money within a year or two, keep it somewhere that won't move much.

Medium-term goals, like a vacation home five to 10 years out, take more thought. The usual advice is to hold a bit more in stocks. What I tend to do instead is ask whether we can move the goal up. Let's look at the math and see if we can pull it forward, because life is short. If you've got a big dream you can afford, go do it. Don't put it off.

Long-term money is the easy call. If you're saving for something 10 to 20 years away, like retirement, that money can sit mostly in stocks and ride straight through the noise. And if you keep investing on a schedule while prices are down, you're just buying the same shares cheaper.

Why does diversification beat trying to predict?

Diversification beats prediction because you can’t reliably call which slice of the market will win. A crisis proves it.

Put it on your bingo card: a year with a major war in the Middle East. What would you guess happened to international stocks? If I told you they'd be outpacing U.S. stocks through all of it, you might have laughed. And yet that's exactly how the first half of 2026 has gone. That kind of surprise is the whole argument for spreading out across U.S. and international, small and large, growth and value, and then sticking with it.

So when the headlines have you itching to make a big change, the answer to that itch is usually no. The only time it makes sense to pull money out of your portfolio is to fund a real goal. Not to outrun a news cycle.

Is a downturn the time to reassess your risk tolerance?

A downturn is a fine time to rethink your risk tolerance, as long as you're rethinking and not panic-selling. Eventually we'll get a major recession. I don't know if it's this year or 10 years out, but a big one is coming, and stocks can go down hard when it does.

So ask yourself an honest question. If your portfolio dropped a lot, could you handle it? Would it change how much you work, or push you into a decision you'd regret? If the answer is yes, it's worth dialing back risk a notch.

Plenty of people who felt great being all-in on stocks during a long bull market find their risk appetite changes as they get older. Adding some bonds can be the right call. Just do it in a tax-smart way, which usually means not parking a target-date fund inside a taxable brokerage account, where you'd owe taxes on income you never needed to generate.

What to do instead of panicking

The strongest response to a scary market isn't a big move. It's a handful of small ones you repeat no matter what the news says.

• Keep contributing. Recurring contributions to your brokerage and retirement accounts keep you buying through the dips.
• Rebalance on a schedule. Letting an algorithm rebalance for you adds to what's lagged and trims what's run, keeping your risk in check with no guesswork.
• Harvest tax losses. When markets fall, selling a losing position to offset future gains turns a down market into a tax win.
• Max what you can. Fund backdoor Roths and your 401(k), 403(b) or solo 401(k) before you worry about the hard stuff.

None of that requires a market forecast. That's the point. After helping build thousands of financial plans, I keep coming back to the same pattern: how much you save matters far more than what the market does during any one crisis. You don't need to know what oil does next, or how the next conflict resolves, to make good decisions — you need a plan that already accounts for not knowing. Stay calm, keep your short-term money safe, let your long-term money work and don't let a news cycle talk you into a permanent change.

If you'd like a portfolio built around your timeline and your tolerance for risk, that's the kind of work SLP Wealth does for clients every day.

Frequently asked questions

Here are the questions readers ask most when a crisis hits.