The world is on high alert for terror after the savage attacks in Paris that left 130 people dead and many others injured. This terrible act reminds us that there are more important things than money.

Yet, I fear that terrorism itself is becoming a wild-card factor that all investors must weigh and consider.

#-ad_banner-#Before Paris, ISIS claimed responsibility for taking down a Russian passenger jet returning from Egypt. Investigators combing through the wreckage discovered evidence of a bomb. And there has since been another attack within the past few days by al-Qaeda that left dozens dead at a Radisson Hotel in Mali.

There have been other recent attacks in Nigeria, Denmark, Lebanon and Turkey.

I don’t know what will happen in the days and weeks ahead. I would like to think that the worst is over. We all would. But common sense says otherwise. By all accounts this jihadi cancer is spreading, and it’s far more likely that the United States and other western nations will be drawn into further conflict.

Normally, I would be talking to you about economic or financial matters today. To be sure, I’d much rather be discussing employment reports or factory orders. But my job is to call attention to anything that might damage your portfolio — and acts of terror can accomplish that just as surely as rising interest rates or a weakening economy.

It seems callous to think about money when lives are at stake. But that’s why it’s important to consider such matters now, rather than after the next attack.

I’ll never forget the aftermath when the New York Stock Exchange finally reopened on September 17, 2001. I was working as a financial advisor at the time and received lots of calls from nervous clients as the Dow Jones Industrial Average plunged 684 points that day. The Dow went on to lose 1,370 points that week, a 14% decline. In just five days, investors saw $1.4 trillion in stock market assets wiped out.

The aftershock of a terror attack can easily rattle consumers and send the economy into a tailspin. We saw that following the 2004 Madrid train bombing. The London Bombings in July 2005 also suppressed economic activity for a while, as traffic to the popular West End retail shops and theatres plunged by 30% in the ensuing weeks, according to the London Chamber of Commerce.

If ongoing geopolitical concerns are causing you anxiety, then it might be time to rebalance your accounts, or at least alter the way future contributions are allocated. I’m reminded of an old saying: when times get tough, it’s not the return on your money that counts, but the return of your money.

That’s exactly why in my own 401(k) I’m pulling some money out of riskier asset classes (like emerging markets) that suffer the most when investor confidence is shaken. I am also tripling my cash position to 15% from 5%. That’s not a huge overhaul, but it does offer greater downside protection.

Even without terror threats, there are other concerns.

First off, earnings among S&P 500 companies declined 1.6% during the third quarter. Profits were down in the second quarter as well. This is the first earnings recession of back-to-back contraction since 2009. Revenues have actually fallen for three consecutive quarters. And the prognosis for the fourth quarter doesn’t look great either.

As I write this, of the 101 companies to issue fourth-quarter earnings outlooks, just 26 were positive, while 75 were negative. So, bad guidance outnumbers good guidance by a 3-1 margin.

That wouldn’t be as worrisome if stock prices were low, discounting the weak bottom lines. But according to FactSet, the S&P 500 is now trading at a 12-month forward earnings ratio of 16.4. By comparison, the index has traded at 14.2 times earnings over the past 5- and 10-year periods. So relative to historical norms, stocks are currently about 15% overvalued.

Even the optimistic billionaire Warren Buffett has been dumping stocks. His latest filing shows reduced stakes in holdings such as Viacom, Chicago Bridge & Iron and Bank of New York Mellon.

Of course, we don’t know the motivation behind these sales (some may have been to raise cash for acquisitions). Still, trimming stakes in a total of eight different holdings isn’t a bullish sign.

With all these crosscurrents, the markets are on edge. And when the market starts overreacting to the downside, I lean toward defensive sectors.

Right now, I am upping my exposure to one of the safest of all sectors — one whose earnings and dividends are so predictable that the stocks are often treated like bonds.

I’m talking about utilities.

That’s not to say that utilities are bulletproof. They are susceptible to environmental mandates and regulatory changes, for example. More important, they are also vulnerable to rising interest rates.

But the risk has been exaggerated. During the last rate-tightening cycle from 2004 through 2006, when the Federal Reserve lifted interest rates to 5.25% from 1.0%, the SPDR Utilities Select Sector ETF (NYSE: XLU) still managed to gain ground.

This resilient group can thrive under almost any condition. Should the economy drag because of ongoing terrorist threats or any other reason, consumers and businesses will cut back spending in many areas.

But I can tell you this: electricity, gas and water won’t be among them.

In a recent issue of my premium income newsletter, High-Yield Investing, I introduced my readers to a top-tier utilities fund that has trounced 99% of its rivals over the past decade. Should the market get dicey, this fund should offer some shelter — and a dividend yield of nearly 7%.

Bottom line: we don’t want fear to dominate our thinking. But we also want to be practical. Consider adjusting your allocations and looking into defensive sectors like utilities right now. Don’t automatically assume that you must sacrifice strong total returns in exchange for the defensive characteristics of utilities, either.

P.S. Want to know the simplest way to “recession-proof” your portfolio? These eight ‘Hall of Fame’ stocks gained 10% during the Great Recession… and they can do it again. Learn more about this elite asset class in my High-Yield Hall of Fame report here.