When stock markets are rattled, even by war, it usually pays for investors to be patient

Key Points:

• The U.S. stock market has historically recovered from steep declines caused by crises, and experts advise investors to stay patient and avoid moving 401(k) investments out of stocks unless the money is needed soon.
• The ongoing war in Iran has disrupted oil supplies through the Strait of Hormuz, causing oil prices to spike and potentially reach $200 per barrel if the conflict continues, which could lead to broader economic impacts through higher costs for transportation and electricity.
• The S&P 500 has experienced its longest losing streak in nearly four years, falling about 8.7% below its record, with the Dow and Nasdaq also entering correction territory amid volatile market swings driven by war-related uncertainties.
• While market corrections are common and can help prevent overvaluation, timing the market is difficult; financial advisors recommend investing only money that can be left in stocks for several years and caution against selling during downturns.
• Younger investors benefit from having more time to recover from market drops, while older investors and retirees should consider reducing withdrawals to preserve investment longevity; those forced to withdraw early from 401(k) accounts face taxes, penalties, and lost growth potential.