14 Mar 2022

The war in Ukraine puts into perspective what is important in life.

The negative impact this has had on markets and valuations seems so insignificant in comparison to the suffering of so many innocent people. We do still have a responsibility to our clients and, without in any way diminishing the events unfolding in Ukraine, we felt it was important to provide some re-assurance and practical advice.

Recent news has been dominated by the tragic events taking place in Ukraine.  While sanctions have been targeted at Russia there will undoubtably be some pain felt throughout the Western economies.  Obviously companies that have a large presence in Russia or dependency on the Russian economy will likely take the largest hits, however, most companies will be impacted through rising energy prices. 

Russia’s invasion of Ukraine could be the most important geopolitical event since the fall of the Berlin wall and one of the greatest tragedies of our lifetimes and we now find ourselves in a world full of uncertainty – just as we did at the start of the Pandemic. The circumstances this time are different, but our advice remains the same:- “Don’t panic”.

There are always things that cause fear and uncertainty. Even before the start of the conflict in Ukraine we were in “Bear Market” territory. But if recent history has taught us anything it is that markets will, and do recover. We saw all the major stock market indices plummet as the Coronavirus took hold in March 2020, however, within 6 months almost all markets were back above their pre-pandemic levels.

Valuation-led bear markets (i.e., fear and uncertainty) tend to see V-shaped rebounds. We could see a whipsaw rebound so fast and furious — even in the midst of conflict — that many investors won’t have the chance to react and will then be paralysed as they wait for another dip.

We believe our clients portfolios, which are well diversified among countries, regions, sectors and types of investment, are well placed to recover in due course. However, if you have any queries, please do not hesitate to contact us.”

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