Investing During the War [Russia vs Ukraine in 2022]

lipkarlock Sunday, March 06, 2022

Volatility is High During the War

Yes, the Russia and Ukraine war is in full force. Yes, stock market volatility is high.

Once again, there’s more bad news from the Ukraine / Russia war zone. They are now discussing a potential missile strike against Russia. Such news is guaranteed to make any investor jumpy… and perhaps consider bailing out of the market before suffering even greater losses.

But this is not the time to get out of the market! It's a great time to buy! You know what they say - time in the market is more important than timing the market. Stay invested and you'll get through this volatile part of history too.

Remember, investors who cash out before retiring may not be able to recover from making this decision prior to the market rebounding.

Invest in your portfolio despite the volatile market!

As investors, we've all seen the fear of investing in turbulent markets. The good news is that most companies have survived these periods of extreme volatility as well as recessions and even wars.

Look at the Data

Based on the historical geopolitical events and stock market reactions below, there is no need for panic and this war will not affect the US economy fundamentals and stock valuation.

Hence, best to stay on course and buy on the dip.

We expect an immediate negative knee-jerk reaction with the latest development of the Russian-Ukraine Crisis.

In previous geopolitical shocks (outside of World Wars), markets typically overreact before making back their losses.

One recent example was the Gulf War, where the S&P market was down 17% initially, but in 4 months, it recovered back to previous peak levels.

Look at the data below. While most wars will have some drawdown effect on the stock market, they will eventually bounce back.