NEW YORK (CNN/Money) - All this talk of war is enough to keep the savviest investor up at night with worry.

Will stocks get trounced even more? Will oil and inflation go through the roof? Will the economy tank? Given the market's rotten performance of late, the questions are all the more scary. Nobody knows how long a conflict would last -- or whether Saddam Hussein would try to use weapons of mass destruction.

Heading into a period of such uncertainty is a terrible time to take drastic measures with your finances -- in fact, in an accompanying story we offer a sober reminder of why the best course of action may be to do nothing.

Even so, here is are some things to think about as the war drums get louder.

In general, stocks decline in the months following U.S. military action but are higher a year later, according to Ned Davis Research. (See accompanying chart.) Still, war leaves a confusing footprint.

There was a powerful rally during the Korean War in the 1950s and the Dow rose 25.5 percent by the time it was over. But during Vietnam, stocks were rife with volatility and the index lost 2.3 percent between 1964 through 1975. More recently, the Gulf War of 1991 had a muted effect on the market simply because it ended so fast.

War and the Dow How recent conflicts have affected stocks War or conflict  After 1 month  After 3 months  After 6 months   1 year later  End of war or conflict  World War II-Pearl Harbor  -2.4%  -7.6%  -16%  2.2%  46.5%  Korean War  -8.9%  1%  2.2%  14.7%  25.5%  Vietnam War  0.3%  3.7%  7.4%  4.9%  -2.3%  Gulf War  -9.8%  -15.6%   -6.4%  4.9%  0.9%  Sept. 11 attacks   -2.3%  1.7%  10%  -10%  N/A  U.S. attacks on Afghanistan (10/7/01)  5.2%  11.8%  11.9%  N/A  N/A   Source:  Ned Davis Research

"You can look at the numbers different ways and draw different conclusions," said Sam Burns, a researcher at Ned Davis. "It's always been a mixed picture."

The longer the conflict, the more it will impact the economy, said Delos Smith, economist at the Conference Board. For example, in Vietnam, years of combat led to huge government deficits, which contributed to double-digit interest rates by the 1970s. Then oil-producing countries raised oil prices, leading to high inflation.

"The whole key is whether or not (a war) ends quickly," Smith said.

The War Picks The prospect of war shouldn't lead you to up-end your portfolio -- but strategists at Merrill Lynch think small defense stocks will continue to outperform tech. Company  Market Cap  Alliant Techsystems (ATK)  $2.1 billion  Heico (HEI)  $231 million  Integrated Defense Tech. (IDE)  $238 million  Moog (MOGA)  $454 million  Triumph Group (TGI)  $402 million  United Defense Ind. (UDI)  $1.2 billion  See more on Merrill's picks in the Bottom Line

Inevitably, there are winners and losers among individual stocks. For example, by the end of 1991, the top-performing industries were leisure products, gaming and lottery, and health care special services, according to a study by Prudential Securities. (See accompanying chart.)

The hardest-hit areas were oil and gas, hospital management companies, computer hardware stocks, and gold and mining companies.

In general, more defensive sectors such as beverage companies and tobacco often do better in the uncertain months leading up to war, said Ed Keon, chief quantitative equity strategist with Prudential Securities. Once investor sentiment improves, there's a return to more cyclical stocks, such as airlines or hotels. But there are always exceptions.

MONEY: Picks and strategies Peter Lynch: Why he's buying now Stocks: 5 bearbusters Best Funds 2003

The only variable that doesn't seem to change is that investors inevitably miss opportunities in the market when conditions seem the riskiest, Keon said.

"When things seem very risky it often represents opportunity," Keon said.

Though three years into a bear market is not the time to be selling stocks and rushing into bonds, you should make sure that you have a portfolio that fits your needs. And on the eve of war, a conservative tilt that lets you sleep at night isn't a bad thing.

Wall Street's take on 2003 Bill Gross: PIMCO Ed Kerschner: UBS Warburg Steve Galbraith: Morgan Stanley Richard Bernstein: Merrill Lynch Lisa Shalett: Bernstein

If you're worried about your 401(k) or IRA and have 5 to 10 years until retirement, you may want to trim more aggressive holdings slightly -- but nothing dramatic. For example, in equities, you might reduce your high-voltage small cap exposure in favor of more stable large caps (for a list of Money Magazine's best stocks for 2003, click here). You might also lighten up on tech, which is more volatile. To make sure your holding the right securities for your bond holdings, see Money's Best Bonds 2003.

But a younger person with years until retirement might do nothing at all. Over time, the war will make no difference at all. Retirees in 2030 may well ask, "Saddam who?"