Clearly, war and invasions have far more repercussions than merely financial. But somewhat luckily, the financial toll in most cases, for us as Americans (exception September 11th), has been what hits closest to home. And unluckily financially speaking, the biggest savers and investors are then most affected by the financial toll of war and invasions around the world.
Currently, the world – most notably the Ukraine, Eastern Europe and Russia – is experiencing the effects of an invasion that (God help us) may or may not turn into a larger situation. Specifically, the financial effects of the Ukraine invasion by Russia are being felt far beyond Europe and Russia. US and worldwide stock markets are down both from late 2021 highs and most notably in late February.
Here is the point: wars are not the only threat to financial markets. Other factors include:
- Government spending
- Government debt
- INFLATION (which now may affect the new US infrastructure law)
- Tax policy
- Interest rates
- Economic strength and weakness
- Corporate debt levels
- Corporate earnings and losses
- Overbought & oversold markets (euphoria and fear)
- …And the list goes on.
For now, without belaboring the point in a very tense time for our world, please see the chart above that illustrates various scary events – including war and invasions – over the past 50+ years, and the accompanying market reactions that took place over the short-term and longer-term.
Today is a time to be in communication with your financial adviser and to be aware of your spending and savings levels. Both temporary loss and long-term opportunities come about as a result of these types of events. Please feel free to call me to talk more – if we have not already spoken.