Market Movements Amid U.S.-Iranian Conflict
After a stretch of stock market declines linked to the ongoing U.S.-Iranian conflict, some investors are contemplating the idea of “buying on the edge,” which essentially means purchasing assets at temporary lows with the expectation of greater returns when the market rebounds. Yet, financial advisors caution that this approach carries significant risks.
During the last major downturn in 2025, many retail investors were active in short-term buying, but this trend has waned since the recent escalations in the Middle East.
“The strategy sounds appealing, but timing it is really challenging,” noted Joon Eum, a certified financial planner and managing owner of Secure Tax and Accounting in Hayward, California. “It’s nearly impossible to predict how the market will move.” If you’re feeling the “FOMO” about potentially missing out on buying opportunities during this economic downturn, remember: “Missing a push won’t hurt, but making a rash decision could,” he added.
On Friday, the Dow Jones Industrial Average dropped nearly 800 points, finishing at $45,166.64, while the S&P 500 declined by 1.67%, hitting a seven-month low at $6,368.85. The Nasdaq Composite Index, known for its tech-heavy listings, fell by 2.15%, closing at 20,948.36.
However, there was a slight rebound on Monday, aided by remarks from Federal Reserve Chairman Jerome Powell, which helped to alleviate investor concerns about potential interest rate hikes stemming from rising energy costs. Earlier in the day, President Donald Trump commented on social media, asserting that “substantial progress has been made” in negotiations with Iran, though he issued a warning about possibly targeting Iran’s oil infrastructure if a peace deal isn’t reached soon.
Even with this cautious optimism, the S&P 500 ended Monday’s trading lower, sitting roughly 9% below its 52-week intraday high and nearing correction territory. That said, stock futures showed some gains on Tuesday after reports suggested that Trump would be “willing to end the war,” even if the Strait of Hormuz remains primarily closed.
Long-Term Investment Goals
In a declining market, some investors may panic and sell off their holdings, while others might take the opportunity to acquire discounted assets. If you find yourself in the latter group, it could be wise to invest your available cash into assets that align with your long-term retirement goals. However, experts like John Ulin, CFP and managing principal at Ulin & Company Wealth Management in Boca Raton, Florida, state that such a strategy is often most effective when it’s part of a comprehensive plan.
Some investors opt to maintain a reserve of “dry powder”—cash set aside for specific buying opportunities, ideally spread across a diversified portfolio instead of putting all your eggs in one basket like a specific stock or cryptocurrency. “Discipline is essential for success,” Ulin said, adding that these purchases should be integrated into long-term planning rather than impulsively reacting to short-term market fluctuations.
On the flip side, experts warn that waiting for the perfect market bottom while sitting on cash also carries risks. Research from JPMorgan Asset Management indicates that missing out on the market’s best days, which often occur right after the worst ones, can be costly.
If you’re considering a sizable investment, Ulin advocates for “dollar-cost averaging,” which involves committing a fixed amount at regular intervals over a few months, as opposed to waiting for definitive evidence that’s rarely available.
