Dave Ramsey's Advice On What to Do When Markets Drop Due to Iran War

Geopolitical tensions can rattle investors — and recent events involving the U.S. and Iran have reminded many people just how quickly markets can react. If you're watching your portfolio dip, it can be tempting to make sudden moves.

But financial expert Dave Ramsey says moments like this are exactly when discipline matters most, especially if your goal is to grow your wealth over time.

Short-term volatility is nothing new, even when it's triggered by global conflict. Here's what Ramsey says you should — and shouldn't — do when markets drop.

The war between the U.S. and Iran has impacted the stock market in recent weeks

Escalating tensions between the U.S. and Iran have recently caused market volatility. Oil prices have spiked significantly as Iran has largely closed the Strait of Hormuz, which has rippled through broader markets and increased uncertainty for investors.

These types of events tend to create short-term declines or fluctuations, even if long-term market trends remain intact. That's why financial experts like Dave Ramsey often stress focusing on long-term strategy instead of reacting to headlines.

Dave Ramsey says a long-term perspective is key no matter the current events

Dave Ramsey recently addressed market fears tied to global events in The Ramsey Show, emphasizing the importance of staying invested.

"Those who ride rollercoasters only get hurt if they jump off in the middle of the ride," Ramsey said.

He pointed to the COVID-19 market crash as a real-world example. Just 57 days after the market plunged in early 2020, it had already recovered to pre-pandemic levels, highlighting how quickly markets can rebound after sharp declines.

Ramsey's core message is simple — no matter what's happening in the world, reacting emotionally can lead to poor decisions. Instead, he encourages investors to maintain a long-term mindset, typically thinking in terms of at least three to five years when investing.

What to do when the stock market tanks

When markets fall, it's easy to feel like you need to act quickly to protect your money.

However, Ramsey's advice — and that of many financial professionals — is to focus less on reacting and more on sticking to a clear, long-term plan.

Don't pull out of the market

One of the biggest mistakes investors can make during downturns is selling their investments out of fear. While it may feel safer in the moment, locking in losses can make it harder to recover when markets rebound.

Historically, some of the market's strongest gains have followed its worst days. Missing even a handful of those rebound days can significantly reduce long-term returns.

By staying invested, you give your portfolio the opportunity to recover as markets stabilize. Pulling out, on the other hand, can turn temporary losses into permanent ones.

Don't check your stock portfolio every day

Constantly monitoring your portfolio during a downturn can increase stress and can create a cycle of anxiety, which can lead to impulsive decisions. Daily market swings often look dramatic, even when they are part of normal volatility.

Instead, many experts suggest reviewing your portfolio periodically — not daily — to keep your focus on long-term goals rather than short-term noise.

Stay the course

Staying consistent with your investment strategy is one of the most important steps you can take during uncertain times. That includes continuing contributions, maintaining diversification, and avoiding emotional decisions.

Markets have historically recovered from wars, recessions, and other global events. While past performance doesn't guarantee future results, long-term investing has remained one of the most reliable ways to grow wealth over time.

By sticking to your plan, you position yourself to benefit when markets eventually recover — even if the path there feels uncertain.

Bottom line

Market drops tied to global events can feel unsettling, but they are not uncommon. Dave Ramsey's advice centers on staying calm, thinking long term, and avoiding emotional decisions that could derail your financial progress.

If you're feeling uncertain, it may be a good time to revisit your strategy, ensure your investments align with your goals, and take steps that help you start investing with confidence for the future.

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