Russia’s invasion of Ukraine has moved markets from a ‘correction cycle’ to something more substantial in terms of financial, economic, and humanitarian impact. The geopolitical situation compounds other market challenges including high inflation, rising interest rates, waning consumer confidence, and the potential for future COVID variants.
We cannot predict how far and how quickly global market values may fall during this cycle. Nor can we predict when and how quickly market values may move back up. Our client investment strategies and portfolios have been durable through multiple market cycles (2008-09, 2011, 2015, 4Q2018, 2Q2020). All of our planning work together takes into account times like these. Volatility is a normal part of investing. We know that gains come over time and we know that maintaining a globally diversified portfolio based on your specific goals and planning needs leads to the best outcomes. We fully expect the same this time around and our approach will remain consistent in terms of staying the course and rebalancing when asset allocations deviate significantly.
Experience tells us that ‘market timing’ is ill advised, despite the very human tendency to want to ‘take action’ amid turmoil. Your financial interests are best served by remaining disciplined during turbulent times.
You can also also refer to the article “Do Downturns Lead to Down Years?”.
That said, you may be feeling anxious about the current situation and the potential impact on your finances. If so, please reach out and let’s have a conversation.
Michael L. Thompson
Partner & Senior Wealth Advisor