Don’t Worry About Geopolitical Events

April 6th, 2007  |  Published in Asset Allocation  |  2 Comments

I’ve been reading Ask Carrie, a blog over at Charles Schwab, and there was a recent post that caught my eye where a reader was concerned about geopolitical events such as the continued Iraq war, Iran troubles, and North Korean issues; and how they could adjust their portfolio or adjust their retirement planning to help mitigate these risks.

In short, Carrier recommends that you do nothing if you are already following a prudent investing strategy of diversification and risk mitigation in the first place. If you look towards history and see what has happened in the past and how the markets have responded, you’ll see that “The value of the financial assets goes up, dips in response to destabilizing events, and then continues to rise.”

There’s no sense in worrying about the things you can’t control such as what’s going to happen with Iran because you can’t control them. Just try to control the things you can such as a saving a proper amount, diversifying your assets, and being smart with your money – those things will get you farther than tweaking your investments in response to those macroeconomic issues.

  

Responses

  1. Accumulating Money » Carnival of Personal Finance #95 says:

    April 9th, 2007 at 3:43 am (#)

    […] Don’t Worry About Geopolitical Events […]

  2. KMull says:

    April 9th, 2007 at 10:50 am (#)

    If you look at one of the other posts in the Carnival about the returns of the S&P 500, the returns far outweigh any downturns because of world wide events. When you look at the past 50 years, there has been a lot of stuff that has happened. Don’t worry about it, just keep plugging money into that account.