PHOENIX (AZFamily) — As the U.S. stock market reacts to the war with Iran, a longtime financial expert says history offers some reassurance for investors.
Nancy Tengler, CEO and Chief Investment Officer of Laffer Tengler Investments, said markets have traditionally seen volatility at the start of a conflict, but then tend to settle and improve.
What history shows
Tengler pointed to Russia’s invasion of Ukraine as a recent example, noting that stock prices initially fell before recovering relatively quickly.
“So what tends to happen is you get the geopolitical shock, the market reacts, it’s almost always a buying opportunity, and then you start to see the uncertainty go away, and that’s when the stock market does best,” Tengler said.
How markets are reacting now
The Dow, S&P 500 and Nasdaq were all down Tuesday. At one point, the Dow was down 1,200 points, though it ended the day with smaller losses than Tengler had anticipated.
Tengler said she expects the market to see some volatility this week.
Advice for retirement account holders
For those with 401(k)s, IRAs or individual investment accounts, Tengler said staying invested is the priority.
“I advise people to stay invested because this is not the end of the world. And then secondarily, if you can add to either your 401k, your IRA, or your individual investment account, you should do that,” Tengler said.
For those on the verge of retirement, Tengler said most people do not spend all their money in the first year, and that most retirement savings should remain in the market.
“I would say you stay in long stocks. And if you can add anything, you should. But I wouldn’t panic sell,” Tengler said.
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