By AKEMI KONDO DALVI, CPA/PFS, CFP
It’s hard to believe that it’s only March and so much has happened in the world already this year. In just the first two months of 2026, the U.S. captured Venezuela’s president, Nicolás Maduro (and First Lady Cilia Flores), withdrew from the World Health Organization, and took joint military action with Israel to dismantle Iran’s nuclear program.
The Iran War was initiated by killing the supreme leader, Ali Khamenei, and has since set off a broader regional conflict. A week into the conflict, Americans are asking how long this war will continue, what the long-term goals of the operation are, and what the short- and long-term effects will be globally. However, there appear to be more questions than answers at this time.
Tragically, innocent lives have been lost on both sides already. Far from the front lines, there are numerous ripple effects as well. Immediately after the ayatollah’s death, Iran retaliated, sending hundreds of missiles and thousands of drones to U.S. military bases within the region, as well as attacking American allies, including Israel, Saudi Arabia, the United Arab Emirates (UAE), Qatar, and Bahrain. Airports, water desalination plants, government buildings, and embassies were targeted, disrupting every facet of daily life.
Further, the conflict has led to the closure of the Strait of Hormuz, a critical waterway for one-fifth of the world’s oil supply. Such disruption has resulted in a global surge in oil prices and a hit to global stock markets. According to AAA, California’s average gas price for regular fuel averages above $5 a gallon, up from $4.67 just a week ago.
Most recently, Iran selected a new supreme leader, Mojtaba Khamenei, the son of the late ayatollah. The leadership selection is seen globally as an act of defiance, and an indication that Iran will not be quick to settle for America’s chosen new leadership, as Venezuela was.
We are seeing retirement portfolio values fluctuate daily, as investors try to process large amounts of data into quantifiable risk and opportunity. Geopolitical events often trigger short-term market anxiety, but it is important to remember that military conflict has happened before, and we have tools to navigate this type of uncertainty.
In the beginning of any major change, risk of the unknown often initiates a market sell-off by active daily traders, trying to protect themselves from the worst-case scenario. However, as data is shared, we often see investor money move from sensitive market sectors, which need ideal economic conditions to thrive, to more stable or defensive stocks that will provide safety and return, even in undesirable situations.
As the world worries about scarcity of oil, crude oil prices surged towards a peak of $120 per barrel before receding back under $100 per barrel. As a result, investors looked for safe havens like gold, for protection against inflation, devaluation, and instability.
However, from a financial planning perspective, we know market disruptions happen frequently. Although each event is a little different, the market swings, panics, and then recovery tend to have a repeatable pattern, which means we have a set of tools to survive market volatility, reduce panic to a reasonable level, and stay focused so we don’t miss out on the recovery.
1. Diversification
We know that various types of investments react differently to economic events. Diversification is an investment strategy that involves constructing a portfolio of different asset classes or industries that react differently to volatility, reducing the overall risk in your portfolio. A well-diversified account should consist of domestic and international stocks, paired with bonds to create stability.
Within the domestic and international stocks, a diversified portfolio should contain large-, mid-, and small-sized companies, as well as growth and value-oriented stocks.
2. Rebalancing
Rebalancing helps us harness volatility to our advantage. By regularly bringing our investment holdings back to the original risk-tolerance targets, we take the emotion out of investing and systematically lock in gains from appreciated stock when it reaches market highs, avoiding the greed of holding on too long and risking a market downturn.
At the same time, rebalancing helps disciplined investors to buy back underpriced stocks when fear drives a market sell-off, allowing us to “buy low” and look incredibly savvy when the market resumes normal patterns.
3. Evaluate Short-Term Cash
Sequence of returns risk is the danger of locking in losses during poor market conditions early in an investment life cycle (like at the beginning of retirement), damaging the portfolio’s overall long-term longevity. To address risks like this, we should re-evaluate short-term cash needs.
As a standard, you should have three months of living expenses in an emergency fund. For those who are living off their investment portfolio for daily living expenses, it can be prudent to keep 18 months of living expenses in a liquid or low-risk vehicle such as high-yield savings or money market account. These funds can be utilized for short-term spending needs and allow the larger investment portfolio to recover during a temporary market downturn.
Beyond the 18 months of living expenses, a well-structured investment portfolio could also include laddered short- to intermediate-term bonds, to compliment the long-term equities which target growth.
4. Long-Term Focus
While easier said than done, it is important to focus on the long-term goals and objectives. If we believe that this is not the end of the world, then somehow, someway, this too shall pass. History has shown us that structuring an investment portfolio that can ride out various market conditions and volatility has better long-term results than having a portfolio that is too aggressive and requires active trading.
Buying and selling daily means you need to be a successful fortune-teller multiple times, with the ability to determine when to sell before the market crashes, and also when to buy in, likely in the scariest days of economic uncertainty. While some may maneuver successfully once, doing so multiple times with complete accuracy (and low stress) is rarely achieved in an extended horizon.
The bottom line is no one knows if the Iran War will be a short-term or long-term military conflict. With so many uncontrollable variables at play, the most we can do is utilize the tools available that have worked to navigate prior unknowns. One New York Times analyst said, “The best playbook for investing during a war is usually doing nothing.”
As the Iranian situation evolves, let’s stay focused, composed, and compassionate as we navigate towards a reliable path to stability. If you could benefit from a consultation with a financial professional, please reach out to your Certified Financial Planner or CPA Personal Financial Specialist. Whether you are exploring investment strategy, cash flow management, charitable gifting strategies, retirement planning, or navigating new tax policy changes, we’re here to help you make sense of it all.
Source: Bob Veres Insider Information
The opinions expressed above are solely those of Kondo Wealth Advisors, Inc. (626-449-7783, info@kondowealthadvisors.com), a Registered Investment Advisor in the state of California. Neither Kondo Wealth Advisors, Inc. nor its representatives provide legal, tax or accounting advice.
