Nowadays, it’s that war, and that war, when some war stops, a new one starts. People are panicking. Everyone’s asking the same thing. Is World War III about to begin? And if it does, what happens to the stock market? Let me tell you this upfront. Yes. If World War III breaks out in the coming days or months, the stock market will absolutely crash. There’s no doubt about it.
Should You Pull Out Your Money If WW3 Breaks Out?
Should I pull my money out of the market and invest somewhere else? Honestly, that question hit me, too. So, I did what I do best. I dug into history. I researched past global crises, wars, invasions, and economic shocks. And what I found might actually surprise you.
Let’s take a look at what history tells us because the stock market has faced chaos before. And there are some patterns we can learn from.
History Lesson 1:
Let’s travel back to December 7th, 1941. Pearl Harbor just got bombed. America’s officially in World War II. People are freaking out, and I mean really freaking out. So, what happened to the stock market? The market dropped a whopping 3% the next day. That’s it, 3%. I’ve seen bigger drops when Elon Musk tweets something weird about Dogecoin.
But here’s the kicker. Within 1 month, the market had completely recovered. One month during literally one of the biggest wars in human history. Now, if you think that’s weird, buckle up because it gets weirder.
History Lesson 2:
1962, Cuban Missile Crisis. The world is literally seconds away from nuclear war. Kennedy and Kruch are playing the world’s deadliest game of chicken. Everyone’s building bomb shelters. The market drops 7% in 4 days. Sounds scary, right? Well, it recovered in just 10 to 12 days.
History Lesson 3:
Now, here’s where it gets really interesting. When Russia invades Ukraine, the oil prices shoot up like a rocket. Gold goes crazy. Everyone’s talking about World War II again. The S&P500, that’s basically the entire US stock market, dropped 2.6% on invasion day. People are selling everything, running for the hills. But plot twist, within 1 month, the market was trading higher than before the war even started. Higher. Even Bitcoin dropped 8% on the invasion day.
Then guess what? It bounced back, too. It’s like the market has this weird superpower where it freaks out for a hot second, then goes, “Actually, never mind. We’re good.” So now you may be thinking, “I’m smarter than this. I’ll just sell everything now and buy back when things calm down.”
Hypothetical Scenario:
Well, let me break this down with a simple hypothetical scenario. Meet our three fictional investors, each contributing $500 monthly to an S&P 500 index fund from 1985 through 2024. But each followed a different investing strategy.
Let me write about Emma. Emma was the genius. She possessed supernatural market intuition, investing her $500 only at the absolute lowest points of major market downturns. She captured every significant bottom perfectly.
Next, I write about Allen, the unlucky investor. Allen had consistently poor timing, investing his monthly $500 right before every major market crash. His timing couldn’t have been worse if he tried, but she kept on investing.
And finally, we have Hussain, the set-and-forget investor. Hussain took the simplest approach. He just put $500 into the market every month for 40 years, no matter what was happening. War, peace, zombies didn’t matter. No market analysis, no timing attempts, just unwavering consistency. After nearly 40 years of investing, these are the results.
- Emma, with perfect timing, ended up with $3.3 million.
- Allen, with terrible timing, got $2.1 million.
- And finally, Hussain, who is consistently investing, ended up with the most amount of money, $3.5 million.
Explaining the Strategy: Why Consistency Wins:
So, how is that even possible? Let me explain. Hussain’s victory reveals a fundamental truth about wealth building. His money was continuously working for him. While Emma waited for perfect entry points, Hussain’s capital was already growing through compound returns. Even with superior timing, Emma had less money invested during crucial growth periods. Allen’s story is equally revealing. Despite his horrendous timing, he accumulated over $2 million by doing one thing right. He never panicked and sold. Her $240,000 in contributions grew to over $2 million because he remained invested through every downturn.
This comparison illustrates why time in the market consistently outperforms timing the market. The mathematical power of compound growth, combined with regular contributions, creates wealth more effectively than even perfect market timing.
Worst Thing You Should Avoid:
The worst thing you can do, even worse than terrible timing, is to stay out of the market completely. So, if you panic and sell during a crash, you almost always miss the rebound. You have to be right twice. Selling at the top and then buying back in at the bottom. But even if you could do that, which no one can, you still might lose to the person who dollar cost averages because they’ll end up with more money over a longer period. Look,
I don’t know if we’re headed for World War III. I’m not a fortune teller or geopolitics expert, but I do know this. Trying to time the market around scary headlines is like trying to catch a falling knife while riding a unicycle. Possible, maybe. Smart? Definitely not.
Conclusion:
Market crashes can look terrifying, but history shows they never last forever. Wars, crises, and panic come and go, yet the market always bounces back stronger. The smartest move isn’t to predict or time the crash, it’s to stay consistent, keep investing, and let compounding do the heavy lifting. The real rule to build wealth isn’t timing the market, it’s time in the market.
FAQs:
1. Should I pull my money out if the market crashes?
No, staying invested through downturns usually leads to better long-term results.
2. Has the stock market ever fully recovered from wars?
Yes, it has recovered after every major war and global crisis in history.
3. Why is timing the market a bad idea?
Because even perfect timing often loses to consistent investing over time.
4. What’s the safest investing approach during uncertainty?
Dollar-cost averaging, investing the same amount regularly, no matter what.
5. Can bad timing still make you rich?
Yes, as long as you stay invested and don’t panic sell during crashes.
6. What’s the biggest mistake investors make during crashes?
Selling in fear and missing the recovery that follows.