Investment updates • 4 min read
The world woke up on Thursday to the distressing news of Russian missile attacks on Ukraine. While the true cost of these tragic events is a deeply human one, we feel it is sensible to also consider the potential financial consequences on the world’s markets and your portfolios.
Global stock markets opened on Thursday morning 2-3% lower than where they closed on Wednesday as investors weighed up the implications of sanctions. This move is actually relatively small given the circumstances, largely because markets had anticipated the invasion and had reflected the possibility of it in prices already.
Predicting how the situation will unfold and what the end state looks like is near impossible but there are some outcomes that we believe are highly likely.
Our portfolios have reacted with drops similar to those of wider markets in recent days and will likely continue to be volatile as the situation in Ukraine develops. Trying to predict the exact outcome is even harder and more speculative than trying to predict how the political situation unfolds. For long term investors we see three particular reasons to stand firm about our portfolio returns:
However the situation unfolds, we must accept that markets and the value of portfolios may bounce around a bit in the coming weeks. Whether they continue downward or start their recovery is uncertain but for long term investors, the best time to buy is often the most uncomfortable one.
Whilst the financial consequences of the situation are more visible to us in the UK, it is important to remember the tragic human consequences. Our thoughts are with our Ukrainian friends and colleagues and their families at home.
Capital at risk.