Stock Markets Down and Up on Russian Invasion
Published / Last Updated on 25/02/2022
On Thursday markets fell by between 4-6% on the Russian invasion of Ukraine. Two weeks ago, we predicted 5% falls based upon 2014 experience of Russia annexing the Crimea. Last week we suggested it could be more than 5% as huge numbers of troops built up on the Ukraine border.
We have suggested all along those markets will then recover. They recovered from the Crimea annexation in a matter of days. Already, today (Friday 25th) at the time of writing markets were back up by over 1% and at the time of writing/shooting this video that the FTSE 100 is up 2.04% today, India up 2.44% with France and Germany up 1.45% and 1.22% respectively.
So, we have not got it exactly right, but we were not far off.
That said, our view was and still is that Russia will regain political control in Ukraine and a ‘puppet’ government formed. We suggested no military intervention from the West and that has proved the case. Ukraine will be taken control of and then all will be back around the negotiations table re sanctions, gas supplies etc.
Given the upswing today, investors had already factored all the current events in and anticipate the future in a similar way to us.
Our message has been clear and still is. If you are holding and have lost value over the last few weeks, hold and stay calm, markets will recover and then change your risk profile if you so choose. If you are regularly saving e.g., monthly in ISAs or pensions, continue to do so as you will buy more units at a cheaper price that will benefit from subsequent bounce back. If you have cash reserves, then maybe now is the time to invest.
As the WW II UK government message said, “Keep calm and carry on”.
