Investing Strategies in Volatile Markets

The bombing of Iran introduced a new level of uncertainty into investment markets already experiencing seismic changes introduced by AI. Uncertainty is uncomfortable, and it is human nature to want to act in response to it. But assuming your portfolio is properly diversified and reflects your risk tolerance, staying the course has historically shown to be the wiser decision.

Consider this chart from Dimensional Funds:

Source: Dimensional Fund Advisors. Past performance is not a guarantee of future results. Actual returns may be lower. In USD. MSCI data © MSCI 2026, all rights reserved. Data presented in the Growth of $1 chart is hypothetical and assumes reinvestment of income and no transaction costs or taxes. The chart is for illustrative purposes only and is not indicative of any investment. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio

While past performance is not indicative of future results, history does provide context for current events. As you can see, markets have historically dropped in response to unexpected developments but have consistently moved higher once the news is absorbed and reflected in market prices. 

Strategies for Uncertain Times

If you have a good plan, staying the course and sticking to it has historically supported long-term wealth preservation.

A good financial plan is built for the real world. That means:

• Careful analysis of your needs to help you achieve your goals, even in turbulent markets

• Matching your tolerance for risk with appropriate investment allocations so you can sleep at night

• Diversified investments across sectors and the world to provide ballast, should one part of the market start taking on water

• Managing tax liabilities through strategies like tax loss harvesting to help you keep more of your money

Tune Out the Noise

Even before the war in Iran, there was a lot going on in the markets:

• Gold, silver, and copper surged to record highs, fueled by fear, speculation, and stockpiling.

• A few of the “magnificent” mega-cap companies suddenly look a bit less magnificent, and now everyone’s buzzing about “hyperscalers.”

• Meme stocks with loyal fans (but no profits) rocket up, collapse, then sometimes roar back on the next viral rumor.

• Bitcoin was white-hot, then ice-cold, and could be hot again by the time you are reading this.

• “Asset-light” software companies, once market darlings, have lost some of their shine amid fears that easy-to-use AI coding tools will let businesses build their own systems.

• Meanwhile, “asset-heavy” firms — once dismissed as stodgy — are attracting fresh attention. They even have a new label: HALO (heavy assets, low obsolescence).

• And the menu of leveraged ETFs promising two or three times the daily performance of an underlying index or asset keeps expanding, even though they’re not designed to be held for more than a day and rarely behave the way investors expect.

Markets are wrestling with how AI will alter the landscape, and that uncertainty was already there before war and skyrocketing oil prices added to the volatility.  But we’re early in a very long game. One advantage of markets is that they reflect the collective judgment of millions of people who study, build, and invest in these technologies. By owning a diversified portfolio with a long-term mindset, you participate in the upside without risking your nest egg on the newest idea, latest trend, or recent geopolitical event.

If you want to learn more about the power of focusing on investment fundamentals, set aside some time to watch “Tune Out the Noise,” a 2023 documentary directed by Academy Award winner Errol Morris and produced by Dimensional Fund Advisors. The film explores the history of modern finance and the shift from stock-picking to evidence-based investing.

Keep Calm and Carry On

Staying steady in turbulent times takes fortitude. Resist the urge to check the markets daily and remain focused on your long-term goals. Over time, research suggests that long-term buy-and-hold strategies outperform frequent trading. Active traders make emotional decisions and often miss the market’s best days, which typically occur soon after sharp drops, when many have already sold and are waiting for a “better” time to get back in.

It is understandable if you are feeling unsettled, but the most powerful step can often be adhering to your original long-term strategy despite short-term volatility. If your financial plan was built to withstand volatility, the best advice is often to keep calm and carry on, although you should always review your plan if your personal financial situation changes. 

If you are concerned about your plan, please reach out to us if you are a Gold Medal Waters client. If you are questioning your allocation or need financial advice, book a free, initial consultation to learn how Gold Medal Waters can help.

Disclosure: Advisory Services are offered through Gold Medal Waters, a Registered Investment Advisor. This post and material presented are for informational and illustrative purposes only, and do not constitute investment advice and is not intended as an endorsement of any specific investment. As such, this material is not client-specific, we adjust in individual portfolios based on each client's financial plan, income needs, risk tolerance and total asset allocation. Interactive checklists are made available to you as self-help tools for your independent use and are not intended to provide investment advice. While Gold Medal Waters believes information derived from third-party sources to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability about your individual circumstances.  Investors should carefully consider the investment objectives, risks, charges, and expenses associated with any investment. The information discussed is not intended to render tax or legal advice. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.  Investing involves risk including the potential loss of principal, and unless otherwise stated, are not guaranteed. Past performance does not guarantee future results. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Geopolitical events are unpredictable and can lead to significant market liquidity issues and volatility that may not be captured in historical models. Consult your financial professional before making any investment decision.