Iran and Israel have stopped flinging missiles at each other - for now. Remember: we're in a truce right now, not a lasting peace. With that in mind, we asked our experts what they'd look to sell right now on the stock markets as the conflict boils down to a simmer.

On this week's Switzer Investing TV, both AMP Deputy Chief Economist Diana Mousina and Switzer Report’s Paul Rickard offered timely perspectives on where investors may want to consider trimming exposure — and where it may be too soon to make any big moves.

It's worth noting, however, that none of this constitutes financial advice. It doesn't take into account your personal circumstances, it's merely conjecture. You should consider your own circumstances and/or consult with a professional before making any investments.

Resource stocks look vulnerable

For Rickard, the resource sector stands out as the part of the market most exposed to downside risk if conflict in the Middle East escalates.

“If you’re feeling a bit cold, you probably get out of some of your resource stocks, which are already beaten up but they probably get a bit more beaten up,” he said.

The concern is not necessarily about commodity prices falling immediately, but rather how broader economic uncertainty could hit key export customers like China and India.

“It’s a fear of, you know, if this blows up into something big, what does that mean for world economies, world trade? What does it do for the likes of China and India, who are the biggest buyers of our commodities?”

Tech stocks also on the list

The other sector Rickard suggests may warrant some caution right now is technology, particularly US tech stocks, which have enjoyed strong runs in recent years.

“You might sell some of your tech stocks because if the US market’s going to fall, that’s what’s going to do it there. They’ve had a great run. So I think it’s tech and resources to sell,” Rickard said.

He noted that while markets remain surprisingly calm so far, any sudden escalation in global tensions could bring high-growth sectors back to earth quickly.

Defensive stocks fully priced — but not urgent to sell

Even traditionally defensive names like Commonwealth Bank, Telstra and property trusts may not offer much margin for safety at current valuations.

“They probably do okay, but they’re pretty overpriced,” Rickard said.

That said, he isn’t actively reducing these positions at the moment. “At this point in time, I’d probably hang in there… I’m not really a seller. I’m more looking at a chance to buy, but I don’t think this is great value yet.”

Cash gives flexibility

Rickard also reminded investors that unlike fund managers, retail investors aren’t forced to stay fully invested at all times. For those feeling uneasy, holding some extra cash may be the most prudent short-term move.

“For a retail investor, you don’t have to be in the market. Therefore, you can be in cash… you’re not being judged against an index all the time.”

“You get a reasonable rate at the bank at the moment. If you are a bit concerned, just get a bit more cash on board and then look for the opportunity.”

AMP's Diana Mousina: “Go defensive if you need liquidity soon”

While Mousina was less focused on sector-by-sector selling, she did warn that retirees or anyone needing short-term liquidity may want to consider being more defensive.

“If you’re a retiree right now, you’d want to have a large cash balance that you can draw down on in the short term because there is a big risk that markets fall by 5–10%, maybe even a bit higher in the short term,” she said.

That said, AMP’s portfolios had already shifted defensively earlier in the year.

“Our portfolios went defensive already a few months ago and have had more exposures to things like gold as well, and trying to broaden out the international equities exposure away from the US,” Mousina added.

For long-term investors, however, she sees any future dips as potential buying opportunities.

“Unless you believe that we’re going down the path of a hard recession — which is not our view — any large falls in share markets, I think, just provide a buying opportunity.”

While neither expert is predicting an immediate market crash, both recognise that certain parts of the market may be more vulnerable than others if tensions rise further.

For now, the advice is clear: know your time horizon, stay flexible, and be ready to take advantage if volatility opens up better buying opportunities.