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When headlines are dominated by global conflict, market volatility often follows.

For retirees and those approaching retirement, these moments can feel especially unsettling. It’s natural to wonder:

“Should I be doing something with my portfolio right now?”

In Episode 140 of The Last Paycheck Podcast, Archie Hoxton, CERTIFIED FINANCIAL PLANNER®, and Rob Hoxton tackle this exact question. They explore how markets have historically reacted to geopolitical events and, more importantly, what investors should and should not do during uncertain times.

The key takeaway is not about predicting markets. It is about understanding behavior, risk, and long-term strategy.

Should You Change Your Portfolio During a Geopolitical Crisis?

In most cases, no major changes should be made based solely on geopolitical events.

History shows that while markets may react in the short term, they tend to stabilize and recover over time. Making emotional, reactionary decisions often causes more long-term damage than the events themselves.

The better approach is to rely on a well-structured financial plan and maintain discipline.

Why Market Volatility Feels More Intense During Global Events

Geopolitical crises create uncertainty. War, international conflict, and economic disruption can trigger emotional responses that extend beyond investing.

Many investors begin to think:

  • “I can’t afford to lose money right now”
  • “I’m too close to retirement to take this risk”
  • “Should I move everything to cash?”

These reactions are completely natural. As discussed in Episode 140, emotions play a major role in financial decision-making.

The issue is not the feeling itself. The issue is what actions follow those feelings.

What History Tells Us About Markets and Geopolitical Events

Rather than speculating about the future, the episode looks at historical data from major geopolitical events over the past several decades.

Examples include:

  • The 1973 oil embargo
  • The Iran hostage crisis
  • The Gulf War
  • 9/11
  • The COVID-19 pandemic
  • Russia’s invasion of Ukraine

Across these events, the pattern is consistent.

Markets often react negatively in the short term. However, over longer periods, they tend to recover and move higher.

In fact, in the majority of cases reviewed, markets were positive within 12 months following the event.

Why Some Events Led to Market Declines

There were exceptions where markets were still down after one year.

However, those declines were not primarily caused by the geopolitical events themselves.

Instead, they were tied to larger economic issues, such as:

  • The stagflation environment of the 1970s
  • The dot-com bubble collapse around 2001
  • The financial crisis in 2008
  • Inflation-driven market challenges in 2022

The lesson is important.

Geopolitical events may trigger volatility, but broader economic conditions are often the real driver of sustained market declines.

Can You Time the Market During a Crisis?

One of the most common reactions during uncertainty is the urge to “do something.”

This often leads to market timing decisions, such as:

  • Selling investments to avoid losses
  • Moving to cash temporarily
  • Waiting for the “right time” to get back in

The problem is that market timing is extremely difficult to execute successfully.

Research consistently shows that missing just a handful of the market’s best days can significantly reduce long-term returns.

In many cases, those best days occur during periods of high volatility.

As highlighted in the episode, trying to time the market can cost investors substantial long-term growth.

Should I move my investments to cash during a crisis?

For most investors, moving entirely to cash during a crisis is not advisable.

Selling during market declines locks in losses. If the market rebounds, those gains are missed, making it difficult to recover.

A disciplined investment strategy typically outperforms reactive decisions driven by fear.

Is it safer to reduce risk as I approach retirement?

It is reasonable to adjust risk as retirement approaches, but eliminating risk entirely can create new problems.

Retirement can last 20 to 30 years or longer. During that time, investments must continue to grow to:

  • Offset inflation
  • Support ongoing withdrawals
  • Maintain purchasing power

The goal is not to eliminate risk, but to manage it appropriately within a structured plan.

How do I protect my retirement income during market volatility?

Protection comes from structure, not reaction.

A well-designed retirement plan often includes a bucket strategy, which separates assets into:

  • Short-term funds (cash or equivalents)
  • Intermediate-term investments (bonds)
  • Long-term growth assets (stocks)

This approach allows retirees to:

  • Cover near-term expenses without selling volatile assets
  • Maintain long-term growth potential
  • Reduce emotional decision-making during market downturns

The Real Risk: Emotional Decision-Making

One of the most powerful insights from Episode 140 is that the biggest risk is often not the market itself, but investor behavior.

Fear-driven decisions can lead to:

  • Selling at market lows
  • Missing recovery periods
  • Permanently reducing long-term wealth

In extreme cases, these decisions can impact a retiree’s lifestyle for decades.

Once losses are realized and recovery is missed, it is often difficult to regain that lost ground.

Why a Financial Plan Matters More Than Headlines

Market volatility is inevitable. Geopolitical events will continue to occur.

What matters most is whether your financial plan is designed to handle uncertainty.

A strong plan includes:

  • A sustainable withdrawal strategy
  • Diversified investments
  • Tax-efficient income planning
  • Contingency strategies for downturns

When these elements are in place, investors are less likely to react impulsively to short-term events.

How to Build Confidence During Uncertain Times

If you are feeling uneasy about your investments during a global crisis, consider focusing on what you can control.

Start with these steps:

Review your income strategy
Ensure your income sources are aligned with your needs and timeline.

Understand your risk exposure
Know how your portfolio is allocated and why.

Maintain liquidity for short-term needs
Having accessible funds can reduce pressure to sell investments at the wrong time.

Stick to your long-term plan
Consistency is one of the most important factors in long-term success.

Common Questions About Investing During Geopolitical Events

Should I sell my investments when markets drop due to global conflict?

In most cases, selling during downturns locks in losses and may lead to missing the recovery. A long-term approach is generally more effective.

Do geopolitical events permanently damage markets?

Historically, markets have shown resilience and tend to recover over time, even after major global events.

How much cash should retirees keep on hand?

This varies, but many strategies suggest maintaining enough liquid assets to cover several years of expenses.

What is the biggest mistake investors make during crises?

Making emotional, reactive decisions rather than following a structured financial plan.

Market uncertainty is unavoidable, but your response to it can make all the difference.

If you want to feel more confident about your retirement strategy, start by evaluating your readiness and identifying potential gaps in your plan.

Download the Retirement Readiness Checklist to help organize your finances and prepare for long-term success:

Download checklist
To learn more, click here to schedule a conversation with Hoxton Planning & Management.
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.