At the end of February 2026, a military conflict involving Iran sent oil prices sharply higher – up nearly 50% in just a few weeks. Stock markets around the world have declined, headlines are grim, and many investors are asking themselves: should I do something? In this article, we'll walk through what has happened, what it actually means for long-term investors – and why the best advice history offers is still the same: stick to your plan.
What happened?
In late February, the United States and Israel launched military operations against Iran. The conflict caused a major disruption to global energy markets: Brent crude oil has risen above $112 per barrel, up from around $72 before the conflict began. Iraq declared force majeure on oil fields operated by foreign companies, and two refineries in Kuwait were struck.
The ripple effects are being felt across the broader economy. The IEA has called the situation "the largest energy security challenge in history." In the United States, gasoline prices have jumped more than 20% in under a month. With inflation picking up again due to rising oil costs, the Federal Reserve is in no position to cut interest rates.
Stock markets have responded: the S&P 500 has fallen for four consecutive weeks. The news cycle is relentlessly negative.
Why does this feel so overwhelming?
When markets fall and the news is frightening, our instincts kick in: do something, protect yourself, get out. That reaction is completely human – and completely understandable. But in investing, acting on that instinct almost always leads to worse outcomes.
When an investor sells in a moment of fear, they make two mistakes at once:
- They lock in the loss – turning a paper loss into a real one
- They miss the recovery – markets often bounce back faster than anyone expects, and the investor sitting on the sidelines misses the best days
Research consistently shows that missing just the ten best trading days in a decade can cut long-term returns roughly in half. Those best days tend to cluster inside bear markets – precisely when it feels most tempting to step away.
What does history tell us about geopolitical crises?
Oil shocks and geopolitical conflicts are nothing new in market history. A few examples:
- 1973 – Arab oil embargo: Oil prices quadrupled. The S&P 500 fell more than 40%. Fear was extreme. Ten years later, markets were many times higher.
- 1990 – Gulf War: Oil prices doubled in months. Markets fell. Investors feared a prolonged conflict and a deep recession. The war ended sooner than almost anyone predicted – and markets resumed their upward path.
- 2022 – Russia's invasion of Ukraine: Energy prices exploded, inflation surged, markets dropped sharply. A year later, markets had already recovered significantly.
In every case, the fear was justified. In every case, the long-term investor who stayed invested came out ahead.
This doesn't mean these crises aren't serious – they are. But the historical record is consistent: geopolitical events are not a reliable guide for investment decisions. A plan is.
What does this mean for you in practice?
If you hold a globally diversified index fund, here's where things stand:
- The energy sector is currently the only clearly positive sector in the S&P 500 – and it's automatically part of your fund
- Technology and other sectors have fallen – but they're also part of your diversification
- European and Asian markets have been hit harder, but they serve to balance long-term risk in a global portfolio
Diversification works precisely because you never know in advance which sector or region will perform best next. So you own all of them. That's why bear markets test a portfolio – but don't break it.
Imagine you have €10,000 in a globally diversified index fund. If the index has fallen 10% over recent weeks, your portfolio is now worth €9,000. That feels uncomfortable – but it's important to remember that the loss is only on paper for now. If you hold the fund and markets recover (as history strongly suggests they will), that value returns over time.
The most common mistakes in moments like this
1. Selling to wait for a better time
Many investors think: I'll sell now and buy back when things are clearer. The problem: markets don't wait for clarity. The strongest recoveries often begin when the news is still bleak.
2. Moving to cash or a savings account
A savings account feels safe – and it's a sensible place for short-term money. But for long-term wealth building, cash is inflation's victim: if inflation runs at 3% and your savings account pays 2.5%, your purchasing power quietly erodes every year.
3. Overweighting energy or defense because they're rising now
When a sector surges, the temptation to pile in is real. But by the time most investors act, markets have already priced in the move. Successful sector rotation is rare even among professionals.
4. Pausing regular monthly contributions
The shares you buy during market downturns have historically been among your best purchases. Stopping regular contributions during a crisis is a bit like refusing to shop when prices are at their lowest.
Summary: what should you actually do right now?
The short answer: probably nothing out of the ordinary.
If you have a long-term plan, a globally diversified portfolio, and a regular monthly investment in motion – let it run. This is exactly the kind of moment your plan was built for.
If you have cash sitting on the sidelines and a long time horizon, it may be worth asking whether some of it should be invested. Not because "this is the bottom" – nobody knows that – but because long-term investors don't wait for the perfect moment.
And if you're not yet investing regularly: moments of uncertainty are a powerful reminder of why it's worth starting. Not because markets will immediately rise – but because long-term investing works precisely when time is on your side.
Key takeaways
- Geopolitical crises are a normal part of market history – each one felt different at the time, and each one eventually passed
- Selling in fear is almost always the wrong move – it locks in losses and shuts you out of the recovery
- Diversification is doing its job right now – energy is up, other sectors are balancing it out, and a global portfolio weathers this better than a concentrated one
- Keep your regular contributions going – the units you buy in a falling market have historically been your best purchases
- Your plan was made for moments like this – trust it, even when the headlines feel overwhelming