What is unfolding in Ukraine is extremely troubling. As Russia presses its military advantage, it is inspiring to see Ukrainians defending their country. And while the images of fleeing refugees and bombed out maternity wards create strong emotions, as your trusted financial firm, we’re here to help you keep those emotions in check as it relates to your financial and investment planning.
Markets were volatile prior to the invasion, and have become even more so over the past few weeks. As we monitor the situation closely, no one can predict market moves. We’ve seen broad selloffs followed by huge rallies – sometimes within the same trading session!
We speculate that volatility will most likely continue, at least for the short term, as investors weigh the impact of rising inflation, energy prices, supply-chain disruptions, and interest rates. Signs of escalation or de-escalation in Ukraine will continue to move the indices.
Amongst the uncertainty, what we do know is that markets have been resilient. In fact, history tells us that major geopolitical events tend to have limited impact on markets after six to 12 months. Most of the time, sticking to your investment strategy may be the best approach. History has also shown us that the largest rallies typically follow the largest contractions. According to JP Morgan, “As of year-end 2019, six of the best days occurred within two weeks of the worst days – but often the spread is much closer than that.”1
We are true believers in the resilience of the American economy. We also feel that the underlying strength of today’s economy still bodes well for overall growth. This doesn’t mean that we are passive. We are taking measured steps to rebalance portfolios, where necessary, as well as performing tax-loss harvesting, if appropriate.
In periods of great uncertainty, our chief priority is ensuring you remain focused on your long-term financial goals, while obviating emotions from investment decisions. We are closely monitoring the overall situation and have taken measured steps to reduce overall exposure to Russian in our portfolios. Please do not hesitate to reach out to us with questions, concerns, or for some reassurance. We are here to support you and your family.
This content may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.