Personal finances and the Iranian war

Dobromir Risov
1 day ago
5 min read

by Dobromir Risov April 2026

Introduction

There are the obvious, immediate effects on your personal finances – higher petroleum prices. What can you do? Option a) is car pooling, b) work from home or option c) is there public transport. You have probably thought of those yourself. Today I talk about the effects on your personal investments. Emotions play an important part here.

Main

As I am thinking about this blog, I ask myself: is it Iran or Iraq. The reason for my short insecurity is I barely follow the news. Several years ago I noticed while watching the news that I felt quite negative. The topics: wars, killings, lawsuits, arguing. No wonder, I feel bad, I also experience helplessness. Watching the news is a lose – lose situation I put myself in. Feeling poorly and being helpless. I started reducing my exposure to news and my mood started improving. I do read the headlines occasionally and that is enough for me to know what I need to know. Now to the financial part.

How will the war impact your personal investments?

The answer is: I don´t know. The question concerns the future and the future is uncertain. Many people in TV or in the newspapers have an opinion. They don´t know either. Check out the blog on Forecasting Markets & Stocks. I advise you, the personal investor: don´t worry about something you have no control over. I know this is easier said than done. Sometimes I do get caught through my own thinking into a fearful state.

From a rational perspective there are two scenarios: Scenario 1: the world goes under tomorrow or the day after. If that happens your investments are not your priority. You have bigger problems. Scenario 2: The world does not go under. This scenario is very probable. When this is the case your personal investments will – if they have suffered at all - recover. That is what long term portfolio allocation is about. Think, do and go drink a cup of tea.

When you set up your portfolio you devised it following specific investment criteria. War is not one of those, don´t add it now. Stick to your criteria. To set up your personal investments professionally check out Courses (List).

A look at the numbers - they don´t lie

While I don´t know the future and have no opinion about it I want to look at the war in Ukraine for some guidance. According to Wikipedia the war started in 2014 already. The latest stage as probably most know it, is more recent, from 2022., some four years ago. How have the stock markets reacted? I picked the Euro Stoxx 50 Index. This is a portfolio of 50 "Blue Chip" stocks from Europe. To assess the impact of the war I look at 5 dates: first prior to the war and then 3, 6,12 and 24 months after that. Here are the results:

Long term portfolio allocation outlasts.

You see the Euro Stoxx 50 was down 3% three months after the war broke out again. The index had dropped by a little more than that after 6 months. One year later, in February 2023 the Euro Stoxx 50 had regained the losses and added some 9% profits, reaching 4,179 points. If you had bought the index right before the war and had kept a cool hand, stayed invested for a year, your patience would have paid off. Your patience was rewarded even more had you stayed for two years. The Euro Stoxx 50 had gained by then 27%. There probably was a short term negative impact on the index following the start of the war. My conclusion is the markets adjusted to the new reality quickly.

But the Oil price

On the next screenshot you see two graphs. The blue graph is the same as the one in the title picture: Crude Oil WTI Continuous Contract. This is a futures contract: it quotes how much do I have to pay today to secure receiving a specified quantity of crude oil in, say, one month from now. The second graph, in black, is the S&P 500: that index dropped slightly following the war in Iran. The same event caused the Crude Oil Index to go up by more than 50% within the same period of time!

Nervous oil markets and relaxed stock markets: Crude Oil & S&P 500.

I encourage you to do the same if your index was not mentioned here. Have a look at how the index was doing before and after the war broke out. The goal is to verify if the negative news actually affect investments negatively.

Summary

From an emotional standpoint I recommend to watch as little news as possible. When you do not get to know about problems you cannot start worrying about them either. From a financial point of view you have to differentiate between the negative impact on your wallet as a result of higher petroleum prices. Before it shows on the gas stations, it show first in the Crude Oil Futures. On the other hand, what happens to your investments? Following the S&P 500 there was a small negative impact in the short term following the outbreak of the Iran war. What long term consequences there will be, cannot be said at this point of time. To get an idea about that I looked at the war in Ukraine: the Euro Stoxx 50 index dropped by 4% during the first 6 months. Later, during a period of 12 -24 months the index recovered and gained almost 30%. In conclusion the data shows: do not panic and stay invested.

Frequently Asked Questions (FAQs)

1. How does the war in Iran impact your personal finances? That depends on your individual situation. How you can soften the higher expenses at the gas stations.

2. What can I do to counter higher oil prices? For your expenses - with a time frame of a month you can probably find car-pooling solutions, public transport, or drive slower. To arrange those things takes a bit of time. By then oil prices may have gone down again.

3. How have markets reacted to the war in Iran? Differently. If you have invested in the S&P 500 – a little down. But, the price for Crude Oil Futures went up by more than 50%. You have noticed that if you drive a car daily.

4. Do I make changes to my personal finances when there are negative global events like a war? There is no genetal rule. But, had you invested in the Euro Stoxx 50 prior to the war in Ukraine, your investments would have lost a little before going up nicely. Differentiate between a short and long term impact. I advise to stay calm and avoid hasty changes as a result of negative news.