Investors are eyeing up new investment opportunities and making portfolio adjustments in response to the conflict in the Middle East, according to our new research.
The vast majority (84%)* of self-directed investors believe the current geopolitical climate will cause global inflation to rise. Of these, three in ten (33%) believe it will cause global inflation to increase significantly, while five in ten (51%) think it will cause it to increase slightly.
Oil shocks can be exceptionally challenging for markets. Almost every business relies on energy in some way, so when oil and gas prices rise, they push up the cost of goods and services across the whole economy. The key variable is duration. If disruption is short lived, then the impact on growth and markets will likely fade. A drawn‑out conflict could lead to something closer to an energy shock, with higher inflation, weaker growth and more financial turbulence. A “stagflation” scenario that is both bad for markets and for household budgets.
Read more: what does the surging oil price mean for your finances?
How are UK investors reacting?
With this in mind, investors are looking to make changes to their asset allocations.
Looking at the numbers, around four in ten (43%) of DIY investors are looking to increase their exposure to energy and/or technology. Other key areas investors are looking to increase their exposure to include AI (42%), Defence (41%), and Gold (41%).,
There are also those looking to reduce exposure to certain asset classes. Airlines (19%), luxury stocks (18%), and oil (15%) are the top assets where investors are looking to reduce their exposure, making sure they are taking the right level of risk with these in their portfolios.
Investments DIY investors are looking to increase or decrease exposure to following the recent conflict in the Middle East:
| Investments | DIY investors looking to increase exposure | DIY investors looking to reduce exposure |
| Energy | 43% | 14% |
| Technology | 43% | 11% |
| AI | 42% | 10% |
| Defence | 41% | 11% |
| Gold | 41% | 9% |
| Oil | 40% | 15% |
| Retail/consumer goods | 36% | 14% |
| Manufacturing | 33% | 13% |
| Silver | 32% | 12% |
| Telecoms | 31% | 12% |
| Airlines | 29% | 19% |
| Luxury | 28% | 18% |
Source: Charles Stanley / Censuswide*
When it comes to investment risk overall, less than a third (27%) of DIY investors are looking to take a high level of risk in the next three months. Many are taking a more cautious approach, with nearly half (47%) looking to take only a moderate level of investment risk over this time.
Are there any safe havens or investments that benefit from higher energy prices?
If you’re investing for the long term with a diversified investment approach, the best course of action during market volatility is usually to sit tight. Market timing – especially during geopolitical crises – is notoriously difficult. Unless your portfolio is heavily concentrated in a single sector or region, the ups and downs should be manageable.
There aren’t many hiding places from an energy shock of this nature. It tends to be bad for both shares and bonds. The former owing to concerns of lower growth, and the latter because of the effect of higher inflation and interest rates.
Some areas that could help diversify and stabilise a portfolio include short-term bonds, gold, and energy stocks, though on days of extreme stress even these see some volatility. During market turmoil, traditional ‘safe haven’ or contrarian assets can also go into reverse as reactionary investors sell whatever they can to make up for losses elsewhere.
Short-term bonds and money market funds
While medium- and longer- dated debt can be highly sensitive to inflation and interest rate expectations, short-dated debt closer to maturity can be a relative sanctuary. High-quality bonds will also be less affected by any concerns about company defaults. Rather like cash, they can add some ballast to a portfolio.
Money market funds can be a good proxy for cash in portfolios to provide a return close to Bank of England base rate. There’s some risk involved as there’s a very small chance that one or a number of underlying deposit or short-term loan assets aren’t made whole if an issuer goes bust. But that would take a very extreme event.
Read more: money market funds – what are they and how do they work?
Gold
Gold’s record as a haven asset is somewhat chequered. Sometimes it does well in times of crisis, but it can also be buffeted by volatility during particularly acute periods of market stress. Often, there’s strength in the US dollar during these times as cash becomes king and gold plays second fiddle. Nonetheless, for those prepared to commit to the longer term, it’s worth having a bit of gold to guard against inflationary concerns taking off.
Read more: should you invest in gold?
Energy stocks
When the oil price is in the driving seat, there aren’t many sectors that perform well. Energy is the one area that directly benefits from elevated prices, though the impact depends on the longevity of the uplift. A spike and subsequent return to lower prices won’t have much impact on energy company profits, but a more prolonged period of higher prices will.
As such, a position in the energy sector could be a good hedge against crisis dragging on, resulting in a more structural change in supply/demand dynamics. But it’s important to remember this is a highly specialist area that can be subject to significant volatility, which is why a dedicated energy fund or group of stocks would normally be a “satellite” position in a broad portfolio.
Read more: Market update as Middle East war continues to escalate
*The research was conducted by Censuswide, among a sample of 1,000 DIY Investors in the UK (’Self-Directed’), defined as; investors who actively choose their own investments (stocks, shares, crypto etc), making their own asset allocation decisions, excluding; ‘passive investors’ who just invest in managed ‘index funds’/ETFs who don’t select their own individual stock and instead invest a diversified portfolio that is managed by someone else. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.
The data was collected between 05.03.2026 – 09.03.2026.
Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.
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