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Investing.com -- UBS analysts advise investors to remain invested despite ongoing geopolitical risks, arguing that market shocks from crises tend to be temporary.

While the ceasefire between Israel and Hamas has raised hopes for stability, UBS warns that it "could prove fragile." Additionally, the bank says the Trump administration's renewed pressure on Iran and Russia’s ongoing war in Ukraine contribute to heightened uncertainty.

UBS notes that "Trump has followed through on his threats to impose tariffs on imports from Canada and Mexico, along with additional levies on Chinese goods."

These moves risk rekindling inflation, potentially halting Federal Reserve easing and affecting markets, according to UBS.

However, the bank cautions against exiting risk assets in response, stating, "Selling assets risks locking in otherwise temporary losses and hampers investors' ability to participate in the next market recovery."

Instead, UBS recommends strategies to improve portfolio resilience. "A well-diversified portfolio can potentially reduce swings in wealth," they write, adding that structured strategies allow investors to maintain stock exposure while mitigating downside risks.

Additionally, "Investors may consider using gold as a portfolio hedge."

UBS also highlights historical trends. ”Since the attack on Pearl Harbor in 1941, the S&P 500 has been higher two-thirds of the time 12 months after the start of a crisis,” wrote UBS, adding that in half of these instances, markets recovered within a month.

Ultimately, UBS believes that geopolitical uncertainty should not drive investors to retreat from markets. Rather, they see an opportunity to strengthen portfolios through diversification and tactical strategies that help navigate volatility.