Round up of Ukraine Commentary

By FMB on 

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Caption: Photo by Max Kukurudziak

At FMB we match your investment strategy to your long-term goals. We have discussions about how comfortable you are with the associated risk and volatility.

Depending on how long you have been an investor, you will have seen the ups and downs over many years. It’s easy for us to say, sit tight and don’t worry. Of course, circumstances can be worrying and here we are again, such a short time after March 2020 when we were sending the same message. But what was true in 2020 is true today. You had a strategy last month, last year and it’s still the best strategy for today.

We have received many updates this last couple of days from the many investment fund managers with a similar message. Here is a round-up of the key points:-

  • Inflation was already rising and now with the Russian invasion of Ukraine we have the spectre of further price rises in energy and food.
  • Instability in energy prices could be short term as Middle East production is boosted.
  • The price of goods produced in Russia and Ukraine may rise due to sanctions and supply issues.
  • The stock market has been jittery at each step, but the price of "safe havens" such as commodities, gold and government bonds have been rising
  • The end of quantitative easing to try and get a grip on inflation. Pressure on central banks to increase interest rates.
  • Although it was widely thought that inflation was peaking, the war in Ukraine may extend this problem beyond earlier expectations.
  • Past precedents. Recent conflicts in Crimea, Iraq and Kuwait showed that markets will react but bounce back when tensions dissipate.
  • Longer term realignment of East/West relations depending on the reaction of China
  • Riding out the storm with a balanced portfolio and focusing on long term growth

It's very difficult at this stage to understand the full implications or the longer-term difficulties ahead, but we will keep you posted.  As you know our multi-asset strategy is designed to minimise risk and volatility in line with your needs. Investments go up as well as down, but the history of stock markets has shown that in the long-term, human ingenuity and resilience has prevailed!

Investments can go down as well as up, past performance is not a guarantee of future performance.

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