Ukraine, China, Iran. Gen Zers, Invest for Tomorrow—Not for Today.

An artillery crew in the Zaporizhzhia region in southeastern Ukraine. (Ukrinform / NurPhoto / Getty Images)

Still wrestling with uncertainty around inflation and tariffs, investors face a slew of geopolitical concerns: the fallout of the U.S. bombing Iranian nuclear sites, growing tension with China, and Russia’s continued attacks on Ukraine. While the news may impact Americans’ wallets in the short-term—an increase in gasoline prices, for example—experts say that especially for young investors with years until retirement, focusing on the long-term is vital.

Of course, that’s hard to do.

“There’s an evolutionary pressure for us to be anxious and to worry about the future,” explains Dan Egan, vice president of behavioral finance and investing at robo-advisor Betterment. “We tend to focus on ‘What are the possible downsides? What am I worried about? What is the news I’m hearing that might be bad for me?’ only, as opposed to the potential upside.”

He says the psychological bias of loss aversion also plays a key role in how we react to the unknown: “We’re more worried about losing a given amount of money than we are excited about gaining an equivalent amount of money.”

The result is that people tend to be more conservative with their money during times of uncertainty, sometimes resulting in panic selling so that they can keep their cash in less risky, more liquid vehicles. But doing so can significantly hurt your long-term returns for one simple reason: The market tends to shrug off even the most worrisome geopolitical events, as it did with the U.S. airstrikes on Iran last month.

Geopolitical events, financial crises and other circumstances that can challenge markets have more of a likelihood of leading to a down period if you are only investing for a short time horizon, explains George Smith, portfolio strategist for LPL Financial. He crunched the numbers and found that between 1950 and 2024, the probability of S&P 500 gains were 74% over one year, 84% over five years, 92% over 10 years and a whopping 100% over 15 years. Past performance doesn’t guarantee future results, so there could be a coming 15-year period in which the S&P 500 doesn’t experience gains—but it hasn’t happened recently.

“The longer you have in the investment, the more time there is to recover from whatever event the market has thrown at it,” Smith says. Over the last 30 years, a $10,000 investment in the S&P 500 ballooned to $192,460 while experiencing a 10.36% annualized return, despite wars, terrorist attacks, escalations in the Middle East and the start of the war between Russia and Ukraine, LPL’s analysis shows.

And remember that by the time you have read worrisome news, it has already happened—and there are professionals sitting in front of their monitors trading all day who are trying to figure out how it will impact markets, Egan explains. They are working with algorithms that operate in milliseconds to make trades while you may be reading the news after the market closes.

“Don’t worry about what is going wrong today, focus on ‘What am I going to do to set myself up for the next year or two years or three years?’” Egan says.

One thing you can do is revisit your financial plan to make sure it still aligns with your long-term goals, and that you are maintaining your ability to save for those milestones by not living outside of your means, explains Megan Miller, a senior wealth advisor and managing director at MAI Capital Management.

“When you’re feeling anxious and stressed out about what’s going on in the world, try to find ways to cut back and add more into your portfolio saving assets so that you feel a sense of control,” Miller says.

You also want to check in on where your money is going. If you don’t have strong job security, you may want to shift your savings efforts to an emergency fund before funneling more into the stock market. But if you are a two-income household with strong job security, it may be time to put more money into the market.

Young investors with long time horizons who are worried about headline risk and geopolitical events should also consider dollar-cost averaging—if they aren’t doing so already—so that they’re consistently contributing to their portfolio, Smith says. The strategy entails investing a set amount of money regularly, such as once or twice a month, so that you avoid timing the market. Making regular contributions to your company 401(k) plan is a form of dollar-cost averaging.

Although dollar-cost averaging in theory puts your investments on autopilot, you can make slight changes to enhance your potential for returns. Stocks are outperforming of late, but if we see a 5% to 10% decline, people with job security and an emergency fund should try to increase their contributions, Miller says. That can be as simple as increasing how much of your paycheck goes to your 401(k) until stock prices level off.

An essential part of all of this is staying calm and thinking before you act—and simply looking back at history and remembering how markets always rebound eventually can help you do so.

“As younger investors, we haven’t had the history of these crises under our belts and I think it’s important to note that it has happened before,” Miller says. “As new as we are to the investing world, all of this really isn’t new to the investing world. Try to take a step back and recognize that it’s some of our first times and it’s scary, but this has happened before and history shows that everything will be fine in the long run.”

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