The unfortunate terrorist attacks in Paris, Beirut, Mali and Tunisia (and the lock down in Brussels) have awoken everyone's vigilance. It goes without saying that preserving human life is paramount and the stock market is secondary. With that being said, the markets carry on.
The inevitable question arises regarding adjustments to portfolios based on recently world turmoil. For the long term investor who is globally and broadly allocated, nothing should probably change. While airline, cruise lines and leisure stocks have suffered recently and may continue to see movement along with the price of oil, it is important to remember those sectors do not make up the entire market. Investing in the broad market helps to minimize the exposure to specific stocks and sectors. The week after the Paris attacks shows just how unpredictable the markets can be on the short term. Most people would have assumed the following week would be a poor one in the markets. But, the S&P 500 had its best week of they year so far. Who saw that coming? This is why we continually stress the importance of maintaining a globally diversified portfolio to help mitigate some of the risk and to avoid making unnecessary changes.
No one has a crystal ball to predict what happens next and while we hope for peace, if tensions continue to grow the market could face extreme volatility in the coming months. This alone is not a reason to make major investment changes. Unfortunately these threats are nothing new and it is just part of the current state of things. The markets tend to eventually get "comfortable" with the world as it is.