Thinking about your investments as war starts is kind of cold and calculating, but also perfectly natural. What should I do when Russia invades Ukraine?
First, remember, investors do not like uncertainty. Nothing is more uncertain than the course of war. Expect a market downturn with every new development that isn’t the war ending.
Second, remember that the markets tend to overreact to initial news because everyone is both reacting, and trying to predict how others will react.
Third, remember if you have a well-diversified portfolio, this sort of thing should not affect your investing strategy. Markets go up and markets go down. As far as your long-term investments are concerned it doesn’t matter whether the markets went down because of war, or just a cyclical phase of the market cycle. Do not panic. Do not sell unless you were already planning it.
Fourth, if you are actively investing for the long-term in your 401k, IRA, 529 plan, or whatever else, KEEP GOING. This is exactly how dollar cost averaging works for you. Your investments when the markets are down become your buying at the bottom in the future. Do not miss the opportunity. Dollar cost averaging does the work for you, buying more shares at the bottom and buying less shares at the top.
Fifth, if you are investing in stocks as bonds (to collect dividends), this is not a problem for you. If you were getting a 2.5% dividend yield yesterday, you are getting a 2.5% dividend yield today. Do not panic. Your strategy is built to take this. Remember the price in between when you buy, and sell is irrelevant. — Advanced: If your stock falls far enough that you can get a higher annual dividend yield you may wish to invest more to increase your yield. If you need to reallocate to other investments that now have a higher yield, be sure to watch your capital gains taxes (or capital losses) and beware of the wash sale rule. Holding may be better overall.
Sixth, if you want to try and profit based on war, I can’t (won’t) help you. Remember don’t try to catch a falling knife. (If you insist, you will be better off getting the right options strategy than trying to short and long shares of stock.)
Seventh, if you want to play oil, remember that the price of oil is actually controlled by a pseudo-monopolistic cartel (OPEC) and you “knowing” what will happen is irrelevant.
Eighth, cryptocurrency and war? I don’t really know. I don’t think anyone does. This is the first “big” war since cryptocurrency was more than a hobby for geeks. So far, it hasn’t been good. On the other hand, crypto was already falling… I won’t pretend to know what will happen.
Good luck and may all the gods bless the people of Ukraine.