Your Investment and the Conflict in Ukraine.



Russia’s presence in Ukraine in itself has led to turmoil in the financial market but also carries significant risks for the global economy that has yet to recover from the pandemic shock. High inflation and jittery financial markets resulting from COVID-19 together with the aftershocks of the ongoing invasion have left investors feeling understandably concerned and unsettled. The key question to be answered is whether these events will have a domino effect on economic growth.


While we can neither anticipate nor entirely be sure how and to what degree individuals’ investments will be affected, it is important for investors to keep their composure. History has taught us that, “knee-jerk reactions” to such events can inflict serious damage to investment portfolios and compromise retirement planning outcomes. We have also learned that, although we don’t know how long this conflict will last, these events are usually temporary. Moreover, timing market exits or re-entries are difficult to gauge at the best of times. Therefore, while it is not always easy to stick to long-term investment strategies during times of upheaval, doing so is more often than not the more sensible option. In this case, the old British saying “Keep Calm and Carry On” rings true and investors should try to keep a level-head in this time of turmoil and handle their investments as they normally would, despite the turmoil.


The bottom line is that the global market will remain choppy for the foreseeable future and that the conflict in Ukraine has undoubtedly kicked up unpredicted dust in the economy. However, as dramatic as these events may be across different asset classes, they shouldn't significantly affect investors' long-term financial plans. As difficult as it may seem, sitting tight tends to be the best course of action in events where unpredictability and volatility is the order of the day.


The situation in Ukraine has undoubtedly demonstrated the importance of investing with the correct company and having a skilled team of portfolio managers and financial advisors. Together, our role is not to avoid such volatility or unforeseen risks but to accept and manage them. While the information provided in this article is purely for educational purposes and is, therefore, not intended as advice, for further information you can contact a broker at PBA Financial Services.


Contact us:

Phone: 011 803 9686

Email: vivian@pbafsa.co.za or bev@pbafsa.co.za

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