It would be entirely understandable if you’ve found yourself feeling more concerned about geopolitics over the past year.
Conflicts, trade disputes, and political uncertainty have been dominating the headlines recently, after all.
According to IFA Magazine, advisers see the biggest threat to equity markets in the next five years as:
- Geopolitical conflict (40%)
- Trade barriers (29%).
As a result, 54% of advisers anticipate that market volatility will increase over the next five years.
At first glance, this might sound worrying. However, it’s often wise to pause, remain calm, and take a broader view of the situation.
In fact, expectations of volatility have fallen compared to 2024, when 74% of advisers anticipated turbulent markets.
More encouraging still, 88% of advisers expect returns to rise over the next decade, despite ongoing geopolitical disruptions.
Rather than focusing solely on how global tension might affect the value of your investments in the short term, it may be more prudent to step back and keep a cool head. Continue reading to find out why.
Not everything is doom and gloom, and there is hope despite ongoing geopolitical concerns
When the headlines focus relentlessly on conflict and uncertainty, it’s easy to assume the outcome is bleak. Yet the bigger picture suggests otherwise.
At Davos in January 2026, the World Economic Forum projected global growth of 3.3% this year and 3.2% for 2027.
This resilience was a result of several factors, namely:
- A more adaptable private sector
- Mitigated trade disruptions
- Continued growth driven by AI
- Government policies to support businesses and households.
Together, these factors have helped the global economy absorb shocks more efficiently than was previously expected.
Even closer to home, UK markets have shown considerable strength.
According to the Guardian, the FTSE 100 index – which tracks the performance of the 100 largest companies listed on the London Stock Exchange – closed up 21.5% on New Year’s Eve compared with the start of January 2025.
This performance beat returns from Wall Street and marked the index’s best year since 2009.
It’s important to remember that these examples don’t mean investment risk has disappeared entirely.
However, they do show that markets often adapt to uncertain conditions, which is worth bearing in mind when pessimism feels overwhelming.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and align with your overall attitude to risk and financial circumstances.
It’s worth cutting through the “noise” and remembering that the media is often negative
Given this positive news about markets, you may wonder why so much of what you read still feels overwhelmingly negative.
One reason for this is “investment noise”, when you’re bombarded with a constant stream of news, opinions, and commentary that can influence how you think about your wealth.
Read more: How understanding the legend of the Loch Ness Monster can help you ignore investment “noise”
Media outlets often focus on worst-case scenarios because negative stories drive more engagement and clicks than balanced or optimistic ones.
When uncertainty rises, headlines might become more dramatic, language more urgent, and the risks exaggerated, all of which can distort your worldview.
Moreover, you now have access to financial news anywhere, at any time, due to technological advances.
While staying informed can be helpful, constant exposure can heighten your anxiety and tempt you to react emotionally.
And many financial influencers (known as “finfluencers”) regularly share predictions and tips on social media, often without context.
Even though some of these insights might be useful, the volume of conflicting opinions can quickly become overwhelming and cloud your judgement.
Without realising it, you may start making decisions based on emotion or the actions of others.
Your financial plan is about long-term growth, so short-term events may not affect you
To cut through some of the noise and stay calm during periods of uncertainty, you may find it helpful to think about what your financial plan is designed to do.
It focuses on long-term growth while taking your goals, investment time frame, and risk tolerance into account.
Moreover, it’s typically structured to balance risk across different assets, so it’s more able to weather periods of short-term volatility without derailing your progress towards your long-term goals.
Market downturns can feel unnerving, but history has shown that markets tend to recover eventually.
According to Google Finance, the FTSE 100 fell from:
- 8,004 on 14 February 2023 to 7,335 on 17 March of the same year
- 8,809 on 28 February 2025 to 7,964 on 11 April of the same year.
These are both significant short-term drops and might have caused concern at the time.
However, taking a long-term view shows that the index’s general trajectory has been upward. It even climbed above 10,000 points for the first time since its inception in 1984 on 11 January 2026, the BBC reports.
If you had reacted emotionally during the dips – perhaps due to the noise – you would have crystallised losses, turning paper ones into real ones.
Conversely, if you’d kept a cool head, shrugged off the noise, and stayed invested, your portfolio would have benefited from the eventual recovery.
Of course, all investing carries risk, and returns are never guaranteed. Still, it might be more prudent to step back when you feel tempted to react emotionally to volatility and geopolitical tensions, and carefully consider your options.
We could help you stay focused on your long-term goals
Understandably, when your hard-earned wealth is on the line, it’s often easier said than done to remain calm during periods of volatility.
This is where the support of a trusted financial planner could help.
We could help you process information about geopolitical tensions and shine a light on how this might truly affect your portfolio.
This could help you secure some much-needed peace of mind and confidence that any decisions you make are based on fact, rather than emotion.
We’ll also regularly review your portfolio, ensuring it evolves with changing situations.
Please email us at info@investmentsense.co.uk or call 0115 933 8433 to find out more about how we can support you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
