Although the geopolitical consequences of the Russian invasion of Ukraine may be significant and the uncertainty affecting financial markets is now evident, in our opinion Putin’s actions are unlikely to have a negative long-term effect on the far-reaching global economy. The short-term reaction we are seeing is certainly expected; however, Russia represents a very small segment of the world economy.
Oil prices have risen to over $100/barrel and inflationary pressures are clear, but these factors were in place prior to the Russian threat. Domestic and global economic policies currently being promoted – government spending, accommodative federal reserve policies, and other stimulus measures already implemented, are likely playing a major role in rising prices (source: Wall Street Journal).
We know based on past experiences that inflation and geopolitical issues can have a negative effect on our portfolio values. However, it is very difficult to predict how long these factors will last and to what degree other influences will affect short-term market performance. “Market timing” in reaction to these events is always something we have avoided and we see no reason to change that view. The diversification and liquidity within your portfolio and a clear understanding regarding your specific growth and income needs are what provide the long-term portfolio protection required to get us through the short-term turmoil global and economic uncertainty creates.
Follow this link to view a video from our partner Kestra Financial (our broker-dealer) which communicates its view on current events. Please let us know if you have any questions or would like to discuss your situation in more detail.