On the Topic of Ukraine

On the Topic of Ukraine

Despite our fervent hopes that Ukraine’s sovereign rights would prevail over tyrannical aggression, it’s now clear that Vladimir Putin has doubled down on the latter.

Time will tell how his plans will play out. If there’s one thing we do know, it’s that you cannot drop a bomb without creating very real reverberations. So, no matter what occurs in the coming days and weeks, please take to heart this reminder for guiding your financial resolve:

Here and now is exactly what market risk looks like along the road to long-term wealth. Your best path remains the same: Stay the course.

In addition to news of the heartbreaking human toll Russia’s military incursion is creating, you’re also going to be deluged by financial and economic analyses on its effects on global markets. As The Wall Street Journal’s executive Washington editor Gerald F. Seib reflected, “Russia’s military incursion deeper into Ukraine is one of those rare events that won’t merely affect the world. It will change the world.”

Impact on Global Economic Policies

For example, it’s no secret that global energy policies will probably need to be revisited, as will existing balances of power. As Dimensional Fund Advisors explored in its timely piece, “Navigating Geopolitical Events,” ample historical precedent illustrates what can happen during times of political strife. Some markets may grow highly illiquid, or close altogether as severe sanctions and other influences impact trading. Then there’s the Fed’s ongoing efforts to tame inflation. Will they, or won’t they raise rates as originally intended?

Again, despite disturbing news, we urge you to remain adherent to your existing investment plans. Think of it this way: If there were no disturbing news, there would be far fewer “opportunities” for risk-averse investors to dump their declining holdings at discount prices. By sticking with your existing, globally diversified allocations, you can seize these opportunities to buy low, and expect to eventually sell high over the long-term.

Portfolio Adjustments

At the same time, we’ve also already offset your global risk exposure (with higher expected returns) through an appropriate allocation to less-volatile holdings (with lower expected returns). This means you’ve effectively already done all you can to prepare your portfolio for riding out the downturns, market illiquidity, and other risk-driven events that may occur in the near-term.

Let’s be grateful for democracy, even though our country is not perfect. We sometimes struggle to attain our foundational aspirations. However, I truly believe, as a nation, we never stop trying. Which is why we are confident we can and will unite during these challenging times to preserve our core values as a nation. One of these core values is the enduring wealth free markets can bring to all who participate in them fairly and in good faith. For that, we are grateful as well.

As always, please don’t hesitate to be in touch with any questions or comments you may have.

Regards,

Fischer Investment Strategies

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This commentary reflects the personal opinions, viewpoints and analyses of the Fischer Investment Strategies, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Fischer Investment Strategies, LLC or performance returns of any Fischer Investment Strategies, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Fischer Investment Strategies, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Financial Advisor at Fischer Investment Strategies | Website | + posts

Ted Fischer is a Fee-Only Certified Financial Planner® & fiduciary, and the founder of Fischer Investment Strategies.

Drawing from more than 25 years of experience in the financial services industry, Ted's expertise includes retirement planning, investment analysis, tax planning, estate planning, and insurance.

Ted has an extensive academic background. He received his Certified Financial Planning (CFP®) designation from UCLA in 2011. He became a Qualified Plan Financial Consultant (QPFC®) and an Accredited Investment Fiduciary (AIF®). Ted has a Bachelor of Science in Marketing, with a minor in Finance, from San Diego State University.

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