The world is facing renewed instability. At the time of writing, Israel is preparing a ground operation in Gaza following an attack by Hamas, and the war between Russia and Ukraine continues nearly two years after it began in February 2022. These high-profile conflicts are only part of a broader pattern: violence and civil strife persist in Afghanistan, the Central African Republic, Ethiopia, Somalia, Libya, Syria and other nations. In this article I offer practical guidance for Canadian investors seeking to navigate the uncertainty that global crises create for markets and portfolios.
Emotions and investing: why feelings matter
Humanitarian crises are deeply distressing, especially for Canadians with friends or family in affected areas. Beyond the human cost, investors understandably worry about how conflict will affect global growth, supply chains and financial markets. Fear can trigger impulsive choices—selling equities, abandoning long-term plans or moving to cash—and those decisions often do more harm than good.
As an advisor, my role is to help clients separate emotion from investing decisions. History shows that economies, governments and markets are resilient. After major shocks such as 9/11, the 2008 financial crisis and the COVID-19 pandemic, markets eventually recovered and long-term investors who stayed the course were typically rewarded. When fear drives market action, the best response is to assess facts about the companies and assets you own rather than reacting to headlines.
How global crises typically affect investments
Certain geopolitical events can trigger rapid market movements, but many of those reactions are short-lived. Wars and violent conflicts are fundamentally political and humanitarian—less often direct economic drivers—so the immediate market response tends to be driven by perception rather than durable changes to business fundamentals or fiscal policy.
For example, a supply disruption in an oil-producing country might push oil prices higher in the short term. In many cases, however, other producers, storage and alternative supply chains mitigate longer-term shortages. Markets price in uncertainty quickly, and prices usually settle as new information becomes available.
Practical steps for Canadian investors
If you are investing from Canada, the most effective actions are often straightforward: avoid panic, review your plan, and stay disciplined. Investment advisors are paid to grow clients’ wealth by focusing on long-term outcomes and avoiding emotional decision-making during brief market storms.
Markets can decline when conflict dominates headlines, but a sell-off does not automatically mean a permanent loss. Over time, markets have recovered from past crises and resumed upward trends. That said, it’s reasonable to expect volatility; the important thing is aligning your portfolio with your time horizon, risk tolerance and financial goals.
Building a crisis-aware investment strategy
My recommended approach in periods of global unrest is to remain calm, emphasize fundamentals and focus on value. Start with your risk profile—if your tolerance or goals have changed, adjust your allocation accordingly. If they haven’t, resist the urge to time the market.
Be sector- and geography-agnostic when looking for opportunities. Technology has driven much of recent market gains, but attractive value can appear anywhere: in beaten-up tech names, cyclical stocks, defensive sectors or companies with stable cash flow. The key is to buy quality businesses—those with durable revenues, solid margins and realistic growth prospects—at reasonable prices, not simply the cheapest securities available.
When fear dominates, many unrelated companies suffer indiscriminate selling. That broad pressure can create buying opportunities for long-term investors who separate headline risk from company fundamentals. Before acting, investigate the reasons behind a sell-off. Is the company’s revenue model intact? Are earnings forecasts and balance sheets sound? If the answers are yes, a temporary market-driven price decline could be a chance to accumulate quality holdings.
Talk to your advisor and avoid making abrupt changes based solely on emotion. Keep diversification in place, rebalance as needed and maintain a cash buffer for near-term needs so you don’t have to sell in a down market. History teaches that crises are often transitory in market terms, and rebounds can be both strong and swift.
Read more about investment strategy:
- How to make better financial decisions—without regret—in a crisis
- How recession fears are shaping investor behaviour and emotions
- How to deal with money and your finances when the economy is stressing you out
- Emotional investing: How to make better decisions with your money