If the past two weeks of conflict in Iran have caused some nerves about your investments, you are not alone.
Even though market volatility can be stressful in the moment, history has shown it often turns out to be more of a blip than a significant change.
The market movement we’ve seen from events in the Middle East has been relatively subtle so far, with the MSCI World, a benchmark for the global stock market, dropping 2% between 2 March and 11 March 2026.
Those that have been invested over the past decade have weathered more intense drops. Following Trump’s Liberation Day tariff announcements, the MSCI World index dropped 11% in the first eight days of April 2025. Looking further back, the MSCI World dropped 13% during March 2020, as Covid-19 emerged. In both cases, the market recovered in just a few months; and 2020 and 2025 both ended the year with positive returns for the index.
Of course, every market event is a bit different, but there are significant similarities between the current conflict in Iran and Russia’s invasion of Ukraine in February 2022. In the first eight market days following Russia’s invasion, the MSCI World fell by 3.5%.
Market recovery didn’t come so quickly in this case. Throughout 2022, the MSCI World fell by 16%. But this didn’t happen just off the back of the invasion in Ukraine. Economies were still reeling from Covid, and there were rapid changes in inflation and interest rates during this period that are much more intense than what is currently projected for 2026.
In the long term, markets were still able to grow. Since February 2022, the MSCI World has created a total return of 55%, leaving those who buckled in for the bumps much better off.
Tempted to sell? Consider these points
When you invest in the markets, you do so on the understanding that prices can go up and down. Stocks and shares have historically delivered a better return than cash in the bank, but there is also a chance you could lose money.
If you pull your money out of the market at the first sign of difficult times, you risk locking in your losses. Selling now, after markets have fallen, means you could be out of the market should share prices bounce back. This isn’t guaranteed to happen, but history shows all markets eventually recover from times of turmoil.
It might be tempting to offload any positions that aren’t rallying – firstly for fear they will never make you money, and secondly because you want to use the proceeds to buy more of what’s doing well. You might be better off looking at laggard holdings and seeing if something has changed to the investment case – and if the answer is no, you may want to reconsider selling unless you need the cash soon.
If you are planning to use your investments in the next couple of years, and are currently quite aggressively invested, there is logic in turning down the risk level. This doesn’t have to mean completely exiting the market or certain investments, but it may mean looking towards assets that are less volatile.
Even though investing during times of turmoil can be uncomfortable, investors who hold their nerve have historically been rewarded. Just ask those who sat tight through the Covid sell-off in February 2020, the global financial crisis in 2008, and countless other difficult times that saw financial markets fall and then rebound. Investing is all about patience and the rewards will come in time.
Hannah Williford: Content Writer
Hannah joined AJ Bell in 2025 as an investment writer. She was previously a journalist at Portfolio Adviser Magazine, reporting on multi-asset, fixed income and equity funds, as well as macroeconomic impacts and regulatory changes...
