Stockmarkets hate uncertainty, and wars, or the potential for them, certainly create uncertainty. Throughout history, though, the direct effect of ‘geopolitical events’, as the money men call them, has been short-lived. Remember Coronavirus, as we called it two years ago?
In fact, share prices the world have been falling since the beginning of the year, and that’s been nothing to do with Putin and Ukraine. It’s inflation, rising interest rates and the possibility that governments might not pump as much money into their economies as a result.
The view of fund managers was, though, that investments would recover this year. Even this morning, if you’re in medium risk funds, you’ll see the benefit of the ‘cushion’ which things like government bonds provide, as the money coming out of shares has to go somewhere.
And I’ve already had calls from braver clients wishing to invest now, while everything’s down. We always recommend that you keep a cash reserve so that you don’t have to cash in investments when they fall, as they always do. But what goes down goes up again, if you hang on in there, which, of course, is our advice.
If you’re our client, you are in well managed funds, and we trust the fund managers you’re with.
