The War in Ukraine and Your Investment Strategy
The War in Ukraine Brought Additional Market Volatility, But Don’t Let That Change Your Strategy For Investing.
The war in Ukraine has commanded attention over the last months. Most concerning is the tragic loss of life, millions of refugees, and broad political upheaval. We pray for resolution to this conflict and for peace. It has also brought new uncertainty to the stock market and the markets have reflected the unpredictability of this moment.
After the invasion began, the S&P 500 Index logged its first correction in nearly two years, which means a drop greater than 10% from its recent peak. During a correction, it is not uncommon for investors to overreact and sell off investments. Selling off can hurt a portfolio in the long run. However despite the continued uncertainty, the U.S. stock market bounced back quickly. Several experts suggest that while the humanitarian toll of this war is capturing worldwide attention, financial implications do not directly correlate.
Volatility is part of investing, especially at the current moment. The market has been reacting to inflation and rising interest rates and now the unfolding situation in Ukraine. But reacting to news in how we invest can cause significant losses. Remember, the market has more than doubled since the initial drop in March 2020 at the beginning of the pandemic.
Despite events in the news, the stock market trends up over time and that includes during times of war.
Stay the course, stick to your plan, and continue to buy and hold quality funds. Plan to hold your investments for years. And don’t try to time the market. The best thing to do right now is continuing to invest at regular intervals.