DarkLight mode
News – 18.11.24
International Men's Day - breaking the silence around men's mental health
International Men's Day - breaking the silence around men's mental health … Read more
Insight – 20.11.24
A change in US Presidency: How might it affect your finances?
In this article, we explore the potential economic and financial impacts of Donald Trump's return to power. … Read more
Upcoming event – 10.12.24
Funding innovation in the technology sector: Are the government doing enough?
Join us for an exclusive roundtable breakfast to explore the question of whether the government are doing enough to support innovation in the technology sector. … Read more
Find us quickly
130 Wood Street, London, EC2V 6DL
enquiries@buzzacott.co.uk T +44 (0)20 7556 1200
Markets’ initial reaction yesterday was stark. Unsurprisingly Russian stocks saw dramatic falls, with the Moscow Exchange down more than 35% at points yesterday. UK and European markets saw 3 - 5% drop offs on Thursday morning and rises in oil and gas prices hit the headlines once again. These changes reflect the immediate economic concern and uncertainty. However, some of this initial concern looks to have been short lived as US markets finished the day higher than they started and Russian, UK, and European markets all started with rises on Friday.
Market volatility around the invasion, and its knock-on effects, is unlikely to be over. It’s clear from past crises that markets don’t react well to uncertainty. However, they tend to have very minor consequences for their long-term prospects. As demonstrated below with references to some of the more notable geopolitical and military events over the past 40 years, downturns are an inevitable part of investing, but they do little to change the overall picture.
Past performance is not a reliable indicator of future returns.
Source: Morningstar Advisor Workstation.
Notes: Global equities = MSCI World USD Index, gross of taxes and fees and reported in USD.
Over this period, many of the more prominent market movements have not been geopolitically driven. Time and time again, whether confronted with financial crises, pandemics, or war, global equities have shown to be an effective long-term hedge against inflation and produce favourable results over cash. When diversification to portfolios is added, a further element of protection against the sharpest fluctuations can also be achieved.
Markets’ initial reaction yesterday was stark. Unsurprisingly Russian stocks saw dramatic falls, with the Moscow Exchange down more than 35% at points yesterday. UK and European markets saw 3 - 5% drop offs on Thursday morning and rises in oil and gas prices hit the headlines once again. These changes reflect the immediate economic concern and uncertainty. However, some of this initial concern looks to have been short lived as US markets finished the day higher than they started and Russian, UK, and European markets all started with rises on Friday.
Market volatility around the invasion, and its knock-on effects, is unlikely to be over. It’s clear from past crises that markets don’t react well to uncertainty. However, they tend to have very minor consequences for their long-term prospects. As demonstrated below with references to some of the more notable geopolitical and military events over the past 40 years, downturns are an inevitable part of investing, but they do little to change the overall picture.
Past performance is not a reliable indicator of future returns.
Source: Morningstar Advisor Workstation.
Notes: Global equities = MSCI World USD Index, gross of taxes and fees and reported in USD.
Over this period, many of the more prominent market movements have not been geopolitically driven. Time and time again, whether confronted with financial crises, pandemics, or war, global equities have shown to be an effective long-term hedge against inflation and produce favourable results over cash. When diversification to portfolios is added, a further element of protection against the sharpest fluctuations can also be achieved.
Uncertainties remain. The impact that new sanctions on Russia will have on the West’s own economies is not yet fully known, nor are Putin’s next steps or the extent of possible further Western actions. There is reliance on Russian energy and Ukrainian agricultural produce in some European nations. Markets have already begun to price in some expectations including the inflationary pressure presented by the surge in wholesale energy prices. However, as is always the case while markets find their way through uncertainty, timing decisions can be fraught with danger and long-term investors with diversified approaches can take comfort knowing that persistence should reward them.
Looking for more information? If you have a query about any of the topics mentioned in this article, please fill in the form below and one of our experts will be in touch.
Investment management
1
Investment review of 2021
Financial planning
3
Seth Dowley
Sustainable investing - navigating a complex environment 
Contact us
6
