As an investor, do you find yourself assuming the brace position before checking your phone for the latest headlines these days? It seems everyone is talking about ‘geopolitical risk’. The big question for all of us is what can we do about it?

Geopolitical risk is what happens when political events disrupt economic activity, markets or investment outcomes. It’s the stuff that dominates news – wars, trade tensions, regime change, resource disputes, terrorist attacks…the list goes on.

And it’s these risks that have been near the top of investors’ minds in the past decade – from Brexit to the pandemic, from the Ukraine War to US political polarisation, from rising protectionism and, now to the US-Israel war with Iran.

Key Principles

It’s not our role here to argue the rights or wrongs of any of these issues. Everyone will have their own view. But as investors, it is worth us reflecting on what we can do to protect our wealth in these times. And that begins with accepting a few principles.

First, uncertainty is a constant in investing. It never goes away. Surprises and shocks are inevitable. But think about this: If the future were always certain, there would be no return from investing because there would be no risk.

Second, major geopolitical events like 9/11 or a global pandemic or Russia’s invasion of Ukraine or the US-Israel attack on Iran are largely non-forecastable. If they weren’t surprising, they wouldn’t be headline news.

Third, while some risks are known and can be quantified – such as the risk of an interest rate rise or a downgrade in earnings or the market falling 30% or more in one year – others, such as a major geopolitical event, cannot be measured.

Value of Advice

At this point, investors ask how they should respond to a world ‘gone crazy’. The truth is there is a great deal you can do, but that task is made a lot easier if you have a financial adviser to help you navigate the uncertainty while keeping you sane.

For instance, a good adviser will tell you that markets are used to dealing with geopolitical uncertainty. Just look at the past 100 years – the 1929 crash, the Great Depression, World War II, the Cold War, the Oil Crisis, the breakdown of Bretton Woods, the collapse of the Soviet Union, the Asian currency crisis, the GFC….

Yet in that century of monumental change and upheaval, the annualised return from global equity markets, after adjusting for inflation, has been about 5-6%.

Of course, the human dimensions of those events are incalculable and major geopolitical news does impact markets. But it’s also true that the influence of geopolitics, from an investment return perspective, tends to be short-lived.

Over the long term, what tends to drive markets the most are economic factors like the pace of GDP growth, demographics, inflation, earnings, productivity, technological change and innovation.

Spreading Your Risk

A good adviser knows that while it is impossible to consistently forecast geopolitical events – and how markets will respond – you can make your portfolio more resilient for whatever might happen next. And that begins with the principle of diversification.

Diversification means spreading your money across different types of investment so that you’re not reliant on just one thing to work. Neither are you more exposed than necessary to any one company, country, sector, asset type or sub-asset class.

Think of diversification as a shock absorber in your portfolio. It doesn’t make the bumps go away, but it does make them a lot less noticeable. More importantly, it helps you to sleep soundly with whatever markets throw at you.

The US market, and particularly tech stocks, have been the standouts of recent years. But so far in 2026, the US has lagged other markets, and tech has been one of the worst performers. By contrast, old economy sectors like energy and materials, and defensives like utilities, have generally outperformed. That’s the benefit of diversifying.

Diversification doesn’t guarantee you won’t experience losses, but it will help reduce the big ups and downs. Like getting vaccinated against the flu, it’s about controlling risk and building resilience, not about eliminating risk completely.

Put another way, diversification doesn’t mean you’ll stop finding the world stressful. But it can reduce the regret caused by acting on headlines whose implications are already reflected in prices.

What You Can Control

We all are tempted to ‘do something’ when the world feels highly uncertain. But your adviser will tell you that in terms of investment outcomes, your own horizon is more important than the 24-hour news cycle.

We saw that in early 2026. The US market entered correction territory at one point after the Iran war broke out, but by mid-April was back at record highs. Yes, further volatility is entirely possible as more unexpected events unfold.

But short-term volatility means far less to someone whose horizon is in years, not days. Of course, your plan may change as you age and as your circumstances evolve. But the point there is that any changes will be due to what is happening in your life, not in the news.

And, yes, it would take a hard-hearted person not to care deeply about the human suffering caused by world events in recent years. But a well-advised investor understands the difference between caring and controlling.

Your adviser’s role is, firstly, to acknowledge your anxiety, which is real enough, but also to shift your focus back to what you can influence – like how your assets are allocated between growth and defensive investments, your cash buffer, your degree of diversification, periodic rebalancing, and (most of all) discipline.

Ordinary investors can’t forecast military conflicts, trade wars, or diplomatic crises very well—but with the aid of an adviser, they can design portfolios and processes that are resilient to geopolitical shocks and that help them stick with their plans.

At the end of the day, even in the craziest of worlds, you can be a smart investor. And the difference between the two is having the right advice.