May 13, 2026
If the Iran war and subsequent stock market tumble had you frantically evaluating your portfolio and agonizing over potential losses, there’s one crucial investing takeaway you may be missing from the short-lived plunge — and it has everything to do with you, and little to do with the economy.
Investors as distinguished as Warren Buffett saw the dip as “nothing” to get excited or flustered about, small as it was compared to historical crashes. Just like Berkshire Hathaway “isn’t in it to make five or six per cent” from diminished valuations, savvy shareholders shouldn’t panic over a similarly modest level of deterioration in their existing portfolios.
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But if you found yourself put off by the brief chaos rather than calm, cool and collected, you should use this moment as a gauge for how to tend to your assets moving forward.
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As one analyst, Opulus co-founder Ryan Greiser, told CNBC (1) on the topic, “everyone has a plan until they get hit in the mouth” — a Mike Tyson quote that is fitting for how the market, and investors’ plans with it, were completely shaken up by geopolitical uncertainty and surging oil prices.
Iran selloff was a “useful stress test” of risk tolerance
Buffett isn’t the only pundit who didn’t balk when others started liquidating, terrified that the market would plummet even further as tensions escalated in the Middle East.
In a recent analysis (2) of the fluctuations seen so far this year, economists at Vanguard — the largest purveyor of mutual funds in the world (3) — urged investors to reflect on any “discomfort” they felt during the decline, as it “reveals something about risk tolerances, which is information that a calm market simply does not provide.”
If the S&P 500’s 9% fall between the end of January and March “prompted portfolio reviews, hedging activity, or restless nights,” they say, “that’s meaningful insight — not because this drawdown was particularly dangerous, but because the emotional signal it provides can help investors tailor portfolio allocations to their comfort zones.”
You shouldn’t feel bad about possessing an aversion to volatility, though, especially given how calm the last decade-plus has been for equity investors. This “unusually friendly” period, as Vanguard Senior Global Economist Kevin Khang calls it (4), has made negative shifts harder to stomach if and when they do hit.
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So you’ve discovered that you may be a more bearish investor than you thought — now what?
Admittedly, it’s easy for someone like Buffett, worth more than $140 billion (5), to shrug at single-digit losses (or missed opportunities for gains) that have far larger consequences for the everyday investor.
But impulsive selling out of fear because prices are down is never a recommendable strategy (6), even from a bearish standpoint. Staying aboard through the good and bad swings (7) of the market is almost always crucial for success in the long game, where the real wealth is grown (8).
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As Greiser says, “what has proven over and over again not to work is making an emotional decision and cashing out when the market is down… If you can stick it out, the right decision is always to do that” (9).
Unfortunately, for those who haven’t been buying and selling for decades — and who thus have a smaller window of tolerance for sudden drops — this is easier said than done.
But, if you can learn with practice to roll with the punches, make an objective and informed estimation of its potential long-term damage and learn to brace and/or pivot accordingly, you’ll give yourself a better chance of making it out unscathed and likely save yourself a lot of stress.
And, if this recent blip has revealed that the risk of any such stress is too much for you, and that your optimal pivot is likely more diversification into safer holdings, then so be it.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
CNBC (1) (9); Vanguard (2); Investopedia (3); Vanguard (4); Forbes (5); Carson Group (6); Scotiabank (7); Capital Group (8)
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Becky Robertson is a senior staff reporter at Moneywise and a lifelong writer. Along with more than a decade covering news at outlets like blogTO and Quill & Quire, she's attended writing residencies around the world. With 33 countries visited, she finds travel to be among her greatest inspirations.
