In that case you may want to upgrade a bit further yet, so you'll be able to replace what you loose during the tournaments and still add a bit, since you probably have a good chance of getting back into the area where fighting is possible.
Or you can just keep the military small and just for the tournament, and focus on producing goods to negotiate. That way you should be able to continue on until ring 11, since at that point you will need orcs to negotiate them.