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Inflation & military conflict … to worry or not to worry?

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As the volatility of 2022 continues with last week’s Russian invasion of Ukraine, many of you might be worrying about the plans you have diligently made and wondering what these new developments mean for your savings.

Russian Conflict

Some points to consider regarding Russia:

  1. The circumstances are fluid and we can expect volatility – the US stock market is seeing significant swings of being down nearly 3% before turning positive on the day. It’s an intraday reminder that the best times come with the worst in these types of markets.
  2. The situation underscores the rationale for active managers in our international investments to make decisions based on which companies will be most impacted by sanctions and fallout.
  3. Inflation is currently the biggest concern for the domestic markets. Russia supplies 17% of natural gas globally and 12% of the world’s oil. Russia also is a big exporter of other commodities like wheat and palladium.

Inflation

You’ve probably already been feeling inflation for the last several months.  The latest consumer inflation measure indicated inflation of 7.5% for those of us using gas pumps, grocery stores and the like.  Consequently, you might be considering:

  • What does this mean for early retirement?
  • Should you delay purchases?
  • Do you have enough saved to accommodate inflated prices?
  • What are the implications of spending more while you’re working?

Is your portfolio set up for confident spending?

What to do next?

If you’ve had any of these questions, or if we haven’t recently met to update your plan, now is the time to continue toward the path of financial confidence, ensuring that you achieve your priorities.  Also, give some thought to these other strategies:

  • Talk with your relationship manager about any changing financial priorities in your life to ensure your asset allocation remains the right course for you.
  • In times like these, investors may get nervous and are inclined to go to cash. However, cash is automatically losing value to inflation. Staying invested is key as the best market days come alongside the worst.
  • Excess cash? Many people have been waiting for an attractive buying opportunity. We believe investing money into these market dips can be a favorable strategy over the long-term.

Let’s talk about how this will affect you.