My $200,000 retirement fund is sitting in cash because the political situation in the Middle East has me very concerned about the future of the stock and bond markets. How do you think I should be invested if I plan to retire in 30 years M.N., West Boylston, Mass.

I don't think the turmoil in the Middle East should play much of a role, if any, in developing an investing strategy for your retirement savings, especially since you probably won't even tap that stash for another 30 years.

That's not to say that the political upheaval and violence there isn't upsetting. Or that unrest in that part of the world can't influence the price of all sorts of assets in the short run, oil being an obvious example.

But as far as your retirement nest egg is concerned, the issue is whether problems there are likely to depress your returns over the long-term. A quick look at long-term returns in the wake of past flare-ups in the region suggests that's not the case.

Over the 30-year span following the 1956 Suez Canal crisis, for example, U.S. stocks returned an annualized 10%. After two other major incidents -- the 1967 Six Day War and the 1973 Yom Kippur War -- U.S. stocks managed 30-year annualized gains of roughly 12%. Those figures are pretty much in line with the stock market's annualized return of 10% or so since 1926.

Besides, even if it became apparent that problems in that part of the world were so severe that they'd affect the financial markets for decades to come, I'm not sure what you could do about it.

Asset values adjust instantaneously as millions of investors worldwide react to new information. Even if you were able to figure out which investments were going to be the winners and losers in the years ahead, by the time you scoop them up chances are their prices will already reflect the new reality. Any advantage you hoped to gain would be blunted.

So while I certainly wouldn't discourage you from following events in the Middle East -- or Europe, Asia, Latin America or anywhere else -- I also wouldn't recommend you overhaul your investing strategy every time tensions build in that region or any other.

How, then, should you divvy up your dough in a world where political turmoil or the threat of it is pretty much a constant?

Clearly, going to cash is the wrong move. Cash equivalent investments like money market funds and FDIC-insured accounts provide security, but the returns are too low to create a large enough nest egg to maintain your standard of living once the paychecks stop rolling in.

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Will turmoil overseas hurt my retirement portfolio?