Special Report: War and Your Portfolio
What a war with Iraq could mean for your investments.
For investors, there's nothing worse than uncertainty. The market's ongoing slump can be attributed to many factors--including continued economic weakness and lack of confidence in company accounting practices--but the threat of terrorism and war with Iraq definitely hasn't helped. Now that it appears war is imminent, investors have been wondering if their portfolios are at risk for more losses.
Our best advice for investors: Stay the course and don't panic. If you're investing for long-term goals such as retirement or a child's college education, the current geopolitical situation shouldn't lead to any changes in your asset allocation. In the short term, an outbreak of war could set off more market volatility, but when the dust settles and life goes back to normal, stock prices will ultimately reflect the value of companies' profits and cash flows.