No. 2 - IRAN RUMOR FUELS OIL SPIKE: Managing Risk During Conflict

If Eric Bolling is right, and speculation about tensions with Iran could metastasize and affect all corners of the market, how can investors manage risk and create opportunity?

Tim Strazzini, the Risk Doctor, says investors will take their riskier assets and put them in safer places when they see geopolitical tensions mounting. When people get risk-averse, it affects the whole market, so the smart play is to move into companies that don't rely on a strong economy to meet Wall Street expectations, Tim says. He also recommends getting out of emerging markets, which tend to be especially prone to volatility.

Jeff Macke agrees - he even says escalations tensions with Iran could trickle down to affect the retailers, who rely on cheap gas prices to keep consumers out shopping (and thus lose revenues when oil prices go higher). He points to names like Procter & Gamble (PG) and Altria (MO) - the two contestants in tonight's Fast Money Madness - as examples of companies that can weather geopolitical storms the best.

Iran is the wildcard, though. Guy Adami says the marketplace has already built in the risk for U.S. military involvement in Iraq and Afghanistan - which is why events in those two countries don't seem to swing the market as they used to. But there is "no comfort level" when it comes to Iran, Guy says.

It's important to remember that today's events were actually non-events, as the rumors never materialized, Dylan says. But if and when a similar news story does break, investors shouldn't think their portfolio is safe just because it isn't directly exposed to the tension in the Middle East. When people get risk-averse, it all rolls over.

Questions? Comments?

Trader disclosure:
On MAR 27, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Strazzini Owns (MO), (T), (VZ), (WMT), Owns Puts in (EEM), is Short Puts in (AUY). Bolling Owns (ICE), (NMX), Natural Gas, Gold, Silver, Soybeans is Short Corn. Macke writes for