Here’s how to invest during a war, according to an expert at game-changing fintech company

With the Russia-Ukraine crisis and the subsequent hike in gas prices, a ridiculously competitive housing market, the highest inflation rate since the early 1980s, and even a potential recession on the way, people are confused about what financial choices to make in order to survive. 

Will Steiner, head of Literacy at investment app EarlyBird, gave Fortune some crucial advice on how Americans can successfully navigate themselves and their families through periods of global unrest. 

Earlybird is an app that allows parents to open custodial accounts for their children to build investment portfolios in crypto and traditional assets. The fintech startup raised $4 million in its initial seed round from Reddit founder Alexis Ohanian and other high-profile investors.

Here are his answers to your most burning questions:

Q: How will my finances be impacted by the Russia-Ukraine conflict?

1. Stocks will stay resilient amid the war. 

Steiner said past precedent shows stocks can maintain value during major conflicts. “If we take a historical view looking at the geopolitical lens, most portfolios heavily weighted in equities tend to be pretty resilient.”

Across World War II and the Korean, Vietnam, and Gulf Wars, he said, the average return for large-cap stocks was 11.4%.

2. The economic impact of the war will hurt more in Europe than in the U.S.

You will see changes at the pump or grocery store or disruptions in the supply chain, Steiner predicted.

In general, though, he said the economic impact will “hurt more” in Europe than in the U.S., given its proximity to the conflict and the importance of Russian gas to some economies, notably Germany.

3. Focus on diversification: think ETFs and gold.

Crises like these make a compelling argument for diversification.

For example, the NASDAQ 100, which is considered to be a tech-heavy stock index, is down 20% year to date, while an equal-weighted S&P ETF fund like RSP is only down 7.5%. So, as a long-term strategy, Steiner says consider allocating your money into more “traditional” assets like gold and ETFs instead of placing all your bets on hyped-up investments like tech stocks.

Q: How should I adapt to inflation?

1. Short-term

Have an emergency fund accessible and use cash to cover expenses, Steiner says. The general rule of thumb is to have three to six months’ worth of expenses in your emergency fund.

2. Long-term

Understand what your cash needs are and make sure any excess money you earn is not sitting in a savings account.

Q: What do I do with my portfolios at the moment? Should I Buy? Sell? Hold?

1. Don’t panic sell

When it comes to portfolios, Steiner recommends you keep calm and carry on.

“Almost always, the best thing to do is to do nothing. I’d say if you have a strategy, stick with it. If you don’t, now is a good time as any to get set up.” 

2. Buy low when the market is down

An economic downturn can often get the best of us. We may be too afraid to enter the market during times of uncertainty but Steiner says it’s important to “stick to a recurring investment and buy every single month no matter what the market is doing.”

One of the fundamental rules of successful investments is buying low and selling high, and you can actually use a bear market as an opportunity to buy low and maximize your profit margins when the market picks up again, he said.

Q: What are some hedging strategies to prepare for unexpected volatility?

Will says that “unexpected volatility is an expected part of investing” but there are three things you can consider:

1. Create a cash position

Instead of having all your money invested in the market, if you have some cash set aside, the volatility is not going to affect you as much. But it’s also important to remember that volatility is different from risk and not always a bad thing. “Unexpected volatility could also be unexpected growth,” says Will. And holding cash could mean you miss out on possible growth opportunities, too.

2. Use stock options

Stock options allow you to buy lower than the market price and sell higher than the market price, minimizing your risk during fluctuations. This seems like an ideal solution, but Steiner says it’s a strategy more suitable for advanced investors. “Stock options aren’t a walk in the park and it requires serious education to know what you’re getting yourself into.”

3. Tail hedging

Tail hedging is a complicated combination of stock options that lose money most of the time but give great returns during a black swan event. This is a strategy not commonly available to the average investor and is mostly used by high net individuals. And Will says there is a lot of debate over whether the payoff is even worth the risk.