How should you approach investing as the Iran conflict develops? Specialists advise against simply fleeing the market or rushing to buy on the downturn.

Main Insights

• Gold prices advanced, oil prices dropped, and U.S. equities gained ground on Tuesday.

• Rapid market swings are making it tough for investors. Experts recommend a cautious approach and warn against taking extreme positions.

Many investors are struggling to predict what might unfold next in the Middle East, and some financial advisers suggest it may be best not to try.

Major asset classes have experienced sharp fluctuations as market participants attempt to gauge the duration of the ongoing conflict in the Middle East. With shifting analyses and signals, it has become increasingly challenging to chart a clear course forward.

The price of West Texas crude oil, for instance, soared above $115 per barrel before tumbling to around $85 in a single day. Gold prices remained relatively unchanged after the conflict began, only to rise once President Donald Trump hinted at a possible resolution. Meanwhile, U.S. stocks have been volatile, rising one day and falling the next, and the VIX index—Wall Street’s measure of market fear—has been swinging between anxiety and calm.

Given these unpredictable moves, financial strategists urge investors to proceed carefully and avoid making drastic decisions.

Why This Is Important

Market professionals are encouraging investors to reassess their risk exposure and steer clear of extreme bets in the stock market. This approach may be especially prudent for those who prefer not to react to every headline or attempt to forecast short-term market movements.

In an interview with CBS News yesterday, President Trump described the U.S. conflict with Iran as "very complete, pretty much," but later in the day, he issued a warning on social media: "If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far." Defense Secretary Pete Hegseth added this morning that hostilities would not cease "until the enemy is totally and decisively defeated."

UBS advises that investors should develop contingency plans. In a recent note, the firm suggested considering, "If the conflict continues for six months and oil prices stay high, what should my portfolio look like?" and then gradually adjust holdings toward that target.

As UBS put it, "We do not believe equity investors should 'run for the hills' nor should they be reflexively 'buying the dip.'"

Looking Ahead: Uncertainty and Strategy

The resolution of the conflict will depend not only on U.S. and Israeli leadership but also on Iran’s response. Although risk assets rebounded after Trump’s initial comments suggesting an end to the war, BCA Research’s Felix Vezina-Poirier noted that "the outcome depends on Iran’s response, leadership cohesion, and willingness to return to negotiations."

Jared Cohen, president of global affairs at Goldman Sachs and an expert on Iran, told CNBC that the leadership situation in Iran adds to the uncertainty. According to his contacts, the previous Iranian leadership established a decentralized military structure that now operates independently. Cohen remarked, "There’s no leader in Iran with the authority, information, and access to that decentralized machine to guarantee cessation of activities. So it’s not clear to me what the off-ramp looks like."

This ambiguity, according to some analysts, suggests that investors should remain cautious.

LPL Financial summed up their advice for investors facing unsettling headlines and market turbulence: "Be patient. Stay diversified. Maintain balanced portfolios that include assets suited for volatility. Seek opportunities that may arise after the turmoil. Those who weather the ups and downs will ultimately be glad they did."