Global Politics

William Suplee |

On February 24 stocks fell sharply in a very volatile day as Russia, as anticipated, attacked Ukraine. First and foremost, our thoughts are with all the people and families whose lives are at stake or will be forever altered by this horrific event. This development follows other drags on the market such as record high inflation numbers, anticipated interest rate hikes by the Federal Reserve and the winding down of the Covid crisis.

It’s tempting when news headlines scare you to do something different today than you did yesterday. While we can't predict what will happen in the coming days, the fact is when we look back historically, the economic impact from these types of events has been generally short-lived. In fact, there hasn’t been a time in the last 50 years that there has not been an ongoing war or conflict somewhere in the world. The chart below will give you some perspective.

Global Politics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On average, stocks pullback 5% three times each year, 10% once or more each year, and 20% every three years. Markets have provided returns to those patient enough to stay invested over time without paying too much attention to market gyrations. Trying to outguess markets has been a loser’s game through history. Over time, markets always return to following the growth of earnings of the companies in them. Keeping things in perspective, sticking to your long-term plan, and staying the course is a better plan than reacting to news events.

If you have any questions or concerns or would like to discuss, feel free to give us a call.