What If The Real Risk Is Your Reaction To The News

Your phone is lighting up, the headlines are relentless, and the market feels like it’s swinging with every update. When geopolitical conflict ramps up and oil prices jump, the most common investor impulse is also the most dangerous one: panic selling. We slow the moment down and talk through why “doing nothing” can be the smartest move when volatility is high and fear is louder than facts. 

We look at how markets have historically reacted to major geopolitical shocks, why they often drop fast and recover sooner than most people expect, and how easy it is to sell what turns out to be the bottom of a temporary dip. Then we dig into a cost many investors forget until it’s too late: taxes. In a taxable account, selling can trigger capital gains tax, and the short-term vs long-term difference can be massive in 2026. If you’re trying to protect your portfolio, handing a big slice to the IRS may be the opposite of protection. 

Finally, we unpack the timing trap. To “win” a panic sell you have to get out at the right time and get back in at the right time, and the best recovery days often show up when the news still feels terrible. Meanwhile, sitting in cash during an energy shock can expose you to inflation risk that quietly eats away at purchasing power. The goal is simple: align your portfolio allocation with your risk tolerance and long-term goals, and avoid turning paper losses into permanent ones. 

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Transcript

SPEAKER_01 0:02

Money isn't just about numbers. It's about the life those numbers allow you to lead. You're listening to Financial Matters with Richard Orring, the show dedicated to helping you make sense of your money and your goals. Here is your host, Richard Orring, and he is here to help you bridge the gap between where you are and where you want to be. Let's dive into today's conversation.

istory Of Market Overreactions

he Tax Cost Of Panic Selling

he Timing Trap And Lost Best Days

alm Moves And How To Reach Us

SPEAKER_00 0:29

Welcome back to Financial Matters with Richard Orring. It's March 2026. And have you looked at your phone, the news, or your investments in the last two weeks, your heart rate is probably a little higher than usual. With the war in Iran, Operation Epic Furry dominating every headline. It feels like the world is on fire, oil's rising, and the SP is swinging back and forth. The instinct right now, sell, get out, protect what's left. But before you hit that confirm button, we need to talk about the smartest move right now. And that might be doing absolutely nothing. Today we're gonna break down the hidden cost of a panic sell from the tax man to the bounce back effect. All right, first off, guys, first, let's breathe. Yes, the conflict in Iran is massive, but history is a stubborn teacher. Looking at data from the last 50 years, from the 1973 embargo to the 1990 invasion of Kuwait, markets tend to overreact to the onset of war and overreact to the recovery. In the last 19 of the 20 major geopolitical shocks, the market returned to its pre-conflict levels in just an average of 28 days. Even right now, despite the chaos, the SP 500 is only about 4% off its all-time high. If you sell today, you're not avoiding the crash, you're likely selling the bottom of a temporary dip. Then there's the tax man. When you sell in a panic, you aren't just losing your position, you're inviting the IRS to the party. Remember, if you're selling in a tax account, there are taxes to pay on the capital gains. There are short-term and there's long-term gains. If you held a stock for less than a year, the capital gains are going to be taxes short-term, which are taxed as ordinary income rates. And in 2026, that could be as high as 37%. Whereas if you hold an investment for over a year, they're taxed as long-term rates, and that's between 15 and 20%. So by selling now, you could be handing over a third of your profit just for the privilege of being scared. The timing nightmare. We gotta talk about it. To win a panic selling, you have to be right twice. You have to be right when to get out, and you have to be right when to get back in. Missing just five of the best days of a market recovery can cut your long-term returns in half. In a volatile environment like 2026, those best days often happen when the news still looks horrible. Terrible. But the markets have already started looking six months ahead. If you're sitting on the sidelines in cash, you're watching the recovery from the window while your purchasing power is eaten alive by war-driven inflation. So the bottom line, the situation in the Middle East is serious, and the energy shock is real. But your portfolio is a marathon, not a sprint. Don't turn a paper loss into a permanent one because of headlines. Take a walk, turn off the notifications, meditate. I don't know what you need to do. But you need to remember time in the market beats timing the market, especially when the world feels like it's losing its mind. If you want to talk more about this, you have concerns about the market, you want to see if your portfolio is still allocated based on your risk, your goals, feel free to give me a call by calling my office at 609-924-2049, or you can go to my website at www.ncfg.com. On that website, there is a link where you can schedule time through Zoom, phone call, face-to-face in my office. Please reach out.

SPEAKER_01 3:53

Now for the disclosures. Richard Oring's branch office is 902-Carnegy Center Suite 510, Princeton, New Jersey, 08540. The branch number is 609-924-2049. Securities and advisory services are offered through Ozaic Wealth 8. Ozaic Wealth is separately owned and other entities andor marketing names, products, or services referenced here are independent of Ozaic Wealth. Please consult your tax specialist for individual advice. We make no specific comments or recommendations on any tax related details.