Change nothing for 72 hours. That single rule does more for a portfolio during a geopolitical shock than any amount of analysis, because decision quality is at its worst in the first two or three days and nothing about a diversified long-term portfolio requires action inside three days. The four steps that follow it — re-read your written plan, check your three real exposures, keep the automatic purchases running, and only then decide whether anything genuinely needs changing — are the whole playbook.
Every year or two, the world goes crazy in a new way. A war starts, a tariff wall goes up overnight, an election delivers a result the polls swore was impossible, an oil chokepoint closes, a bank nobody worried about on Friday is gone by Monday. The details are always new — that is what makes each shock feel uniquely dangerous — but the investor’s situation is always the same: red screens, screaming headlines, and a voice in your head saying this time you should really do something.
I have invested my own money through more than eleven years of these moments — annexations, a pandemic, an actual land war in Europe, energy crises, inflation panics, banking wobbles, tariff seasons. I no longer remember which specific headline caused which specific red week, and that amnesia is the most honest market commentary I can offer. What I do remember is every time I was tempted to act on a headline, and how the maths worked out for the people who did.
This is my evergreen playbook for geopolitical shocks — written in calm weather precisely so it can be read in a storm: what history shows, the numbered steps to take when a shock hits, and the mistakes that feel smart in the moment and cost money for years.
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Two patterns repeat across decades of geopolitical shocks, and I will state both carefully because this is a qualitative historical observation, not a statistical guarantee.
First: markets price geopolitical shocks fast — usually within days — and recover faster than the fear at the time suggests. Studies of major geopolitical events across the post-WWII era point to a consistent shape: an initial selloff, a bottom measured in days or weeks, and a recovery that typically arrives while the underlying conflict or crisis is still running. The market does not wait for the war to end or the tariff to be repealed; it waits only until the uncertainty is priced, then goes back to caring about earnings and interest rates. Event-driven selloffs have historically tended to be shorter and shallower than recession-driven bear markets — the market fears economic contraction far more than headlines. This is pattern-level, not a law of nature: a shock that genuinely triggers a recession can graduate into the longer kind of bear market. But the base case, repeated across decades, is a faster recovery than the moment believes possible. Central banks’ own financial stability work — the ECB publishes its assessments openly at ecb.europa.eu — treats geopolitical risk as one input among many, not a switch that turns markets off.
The expensive mistake is selling into the panic
Second, and more important for your account balance: the expensive mistake is almost never failing to predict the shock — nobody predicts them — it is selling into the panic. The investor who sells during the scary week has to solve a problem the holder never faces: choosing the moment to get back in, while frightened, while headlines are still bad, while the market has often already rebounded. In practice re-entry happens well above the exit price or not at all. I dissected the psychology of this whole doom-loop — why intelligent people reliably sell low — in my piece on why investors panic-sell ETFs, and the one-line summary is: the sale buys emotional relief, and the fee for that relief is your recovery.
The playbook: five steps when a shock hits
Here is the exact sequence, numbered, in order. Print it, save it, whatever works — the point of a playbook is that it exists before the game.
Step 1: Change nothing for 72 hours
Decision quality is worst at peak fear, and peak fear is the first two or three days. Your brain under threat is optimised for fleeing predators, not pricing equity risk premia; every cell of it insists that acting right now is prudence. It is not — it is adrenaline wearing prudence’s clothes. So the first rule is about time, not money: no portfolio changes for 72 hours after a shock. Nothing about a diversified long-term portfolio requires action within three days. If a move is genuinely right, it will still be right on Thursday; if it is only right “right now”, it was never right. In eleven-plus years I have found no exception.
Step 2: Re-read your written plan
While the 72 hours tick, do the only useful thing: re-read the plan you wrote when you were calm. Your written investment plan — why you hold what you hold, what your horizon is, what you promised yourself you would do in a drawdown — is a letter from a smarter version of you to the frightened current one. If you never wrote one, this is the gap to fix in calm weather; my bear market checklist for European ETF investors is effectively the template — it walks through the pre-commitments that turn a crisis from a decision into a procedure. Crises are a terrible time to make decisions and a fine time to follow procedures.
Step 3: Check the only three real exposures
There are exactly three questions that determine whether a geopolitical shock can actually hurt you, as opposed to merely frightening you.
Cash needs inside five years. Money you will spend within about five years — living costs, a house deposit, tuition — should never have been in equities, shock or no shock. If it is safely parked, this crisis cannot force you to sell cheap, and you can ignore the noise; my guide to the ideal emergency fund covers where that money belongs. If it is not parked — if next year’s spending is sitting in an equity ETF — that is a genuine structural problem to fix, calmly, and the lesson to carry forward.
Leverage. None, right? Margin, leveraged ETPs, a loan against the portfolio — leverage is the one thing that converts a temporary drawdown into a permanent loss, because it lets the market force your hand at the bottom. An unleveraged holder cannot be liquidated; a leveraged one can. If you carry leverage into crises, the playbook cannot save you.
Concentration in the affected region. If the shock is in the Taiwan Strait, how much of your portfolio is single-country Taiwan? If it is a European energy crisis, how Europe-heavy are you? Here is where broad indexing quietly pays its dividend: a global all-world fund holds thousands of companies across dozens of countries, and already contains the diversification people scramble for mid-crisis. This built-in insurance is one of the underrated arguments in my comparison of the big all-world funds, VWCE vs WEBN. If you hold all-world, the honest answer to “what should I do about my exposure?” is usually: it was handled years ago.
Step 4: Keep the automation buying
Your monthly savings plan does not read the news, and that is its superpower. The single most profitable behaviour in a shock is boring: let the standing order execute on schedule, buying the same ETF at suddenly lower prices. Every crisis purchase feels wrong at the time and looks brilliant in the ten-year chart. Pausing the plan “until things are clearer” is soft-form panic selling — you are making the same market-timing bet, just with new money instead of old. The whole architecture of automated, judgement-free investing exists precisely for these weeks, which is the core argument of my buy-and-hold strategy guide: the system was built in calm weather so it could run in storms. Protect the automation from yourself.
Step 5: If you must act, act small and pre-defined
Some investors — I am one — find total inaction psychologically impossible in a real crisis. Fine. The mature compromise is to channel the urge into actions that are small and defined in advance. Rebalancing back to target weights if the shock has pushed your allocation outside its bands is a legitimate, pre-defined act. So is deploying a modest, pre-committed cash reserve at pre-set drawdown levels — if you wrote those levels down before the crisis. So is a small defensive sleeve with rules: I hold a single-digit gold allocation under exactly this logic, with the sizing and rebalancing rules I set out in my piece on gold ETCs as portfolio insurance — bought before crises, rebalanced mechanically, never traded on headlines. The pattern in all three: the decision was made in peacetime; the crisis merely triggers it. What you must never do is invent a new strategy while the sirens are on.
What not to do: the three seductive mistakes
Three moves feel sophisticated mid-crisis and reliably destroy value.
Currency panic-swaps. Converting your euros to dollars or francs mid-shock because the headlines say your currency is doomed means paying conversion costs to make a leveraged macro bet at the worst possible price — exchange rates price the fear before you do, exactly as equity markets do. A European earning, spending, and retiring in euros, holding a globally diversified fund that already contains massive non-euro exposure through its underlying assets, has no crisis-week currency decision to make.
Chasing defense stocks (or oil, or whatever the crisis flavour is) after the headlines. By the time you have read the article saying defense spending will boom, the market read it before you, and the repricing happened in hours. Buying the crisis-theme sector after the move means paying peak sentiment for assets priced on the assumption the good news continues. Thematic chasing is the same behaviour whether the theme is war, energy, or technology — I made the general case in my piece on the AI bubble question for European investors, and the crisis version is simply that piece with scarier headlines.
“Cash until clarity.” The most seductive of all, because it sounds prudent rather than fearful. Here is the problem: clarity is not a date on the calendar. The moment when everything feels safe again does not arrive with the ceasefire or the election result — markets recover while the news is still bad, and the “clear” moment, when it finally feels comfortable, is reliably far above the panic lows. “Cash until clarity” is a market-timing strategy where the re-entry signal is a feeling, and the feeling arrives late by construction.
2022: the case study that had everything
If you want one recent episode to study, take 2022: a land war in Europe, an energy shock, the fastest rate-hiking cycle in decades, and — uniquely painful — bonds falling alongside equities, so even the “safe” half of portfolios bled. It was the perfect storm for every mistake in Part 3, and every one of them was punished. Investors who sold equities in the spring of 2022 sat in cash through the recovery that followed; investors who panic-swapped currencies paid costs to chase moves that partly reversed; and investors who dumped their crashed bond funds at the bottom locked in the loss just as higher yields were quietly rebuilding future bond returns. That last mechanism — how the bond crash was simultaneously the worst year in memory and the repair of the asset class — is the subject of my retrospective on the 2022 bond meltdown. The investors who did best in 2022 were, as usual, the ones who did nothing but keep buying. The playbook is not exciting. That is the point: in a crisis, boring is a strategy.
Frequently asked questions
Q: Should I sell my ETFs when a war or major crisis starts?
A: Historically, no. Markets tend to price geopolitical shocks within days and recover faster than the fear suggests, while sellers face the far harder problem of choosing a re-entry point mid-panic. Unless the shock breaks your personal finances – imminent cash needs, leverage – the evidence favours holding and continuing your plan.
Q: Why wait 72 hours before doing anything?
A: Because decision quality is at its lifetime worst during peak fear, and peak fear is the first days of a shock. A diversified long-term portfolio never requires action within three days. If a move is genuinely right, it survives the wait; if it only feels right immediately, that is adrenaline, not analysis.
Q: Should I pause my monthly ETF savings plan during a crisis?
A: No – pausing is disguised market timing with new money. The plan’s entire value is that it buys mechanically at lower prices while you are too frightened to do it manually. Crisis-month purchases are the ones that look best on the ten-year chart.
Q: Isn’t moving to cash until things are clearer just sensible risk management?
A: It sounds sensible, but clarity is a feeling, not a date – and it reliably arrives after markets have already recovered, since prices rebound while headlines are still bad. Real risk management happens beforehand: allocation, cash buffer, no leverage.
Q: Should I buy defence or energy stocks when a conflict starts?
A: Usually you are too late by the time you ask. Markets reprice crisis themes within hours of the news, so buying afterwards means paying peak sentiment. If you believe in a long-term thematic case, size it small and buy on your schedule, not in the week the headlines scream loudest.
European UCITS/ETF investor with 11+ years building a global dividend and index portfolio, and founder of Financial Expert Class. I write every guide here from first-hand experience investing across EU brokers and tax regimes — not theory. More about me →