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Market Update | March 7, 2022

The Russia-Ukraine war is tragic and saddening. Our team is watching the developments closely. We’re hoping for a quick resolution for humanity’s sake. We’re also monitoring the implications for financial markets.

Last week many Western institutions distanced themselves from Russia’s economy – more each day. The pace is rapid of American, European, and other businesses and governments hopping on board the detach-and-sanction bandwagon. It reminds me of the way institutions took quick stances in March 2020 as an unfamiliar virus came to the forefront.

Like a domino effect, the more an institution’s peers take a certain action, the more it seems necessary to do the same. My fear is that such decisions, when taken at large scale and upon short notice like they were last week, could lead both sides of the Russia-Ukraine conflict to dig in their heels deeper while negatively impacting the global economy further.

What are some economic effects of the Russia-Ukraine conflict that we already see? Rising oil prices are one immediate result as oil hits a 13-year high. Higher wheat prices are another as wheat is up about 60% since February 1. These price shocks affect the entire world.

“As the war rages on, we expect lower economic growth, more inflation, more financial market volatility, and further moves to politically isolate Russia,” writes Wouter Sturkenboom of Northern Trust. Many other analysts have similar commentary. These developments underscore the importance of remaining grounded when investing, following your unique time horizon and risk tolerance.

We can’t control the news, but we can focus on the parts of our financial journeys that we can control. The recent market volatility provides motivation to revisit our investing goals and risk appetite if it has been a few years since doing so. Our team would be glad to help in that regard.

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