{"id":560,"date":"2022-03-16T12:40:05","date_gmt":"2022-03-16T12:40:05","guid":{"rendered":"http:\/\/www.a1-financial.com\/blog\/?p=560"},"modified":"2022-03-14T12:45:40","modified_gmt":"2022-03-14T12:45:40","slug":"ukraine-russia-crisis","status":"publish","type":"post","link":"https:\/\/www.a1-financial.com\/blog\/ukraine-russia-crisis\/","title":{"rendered":"Ukraine-Russia crisis"},"content":{"rendered":"

Why investors should take a long-term perspective and not panic<\/b><\/h2>\n
On the 24 February the Russian President, Vladimir Putin, ordered a military invasion against Ukraine. A war that many considered unthinkable had begun. Russia\u2019s invasion of Ukraine has sent shockwaves through pretty much every asset class across the globe. But if you are a long-term investor the best course of action for most individual investors is to keep calm and carry on.<\/div>\n
<\/div>\n

<\/p>\n

Selling into a falling market is the opposite of what successful investors do. Equally important is the fact that no one knows what Russia\u2019s invasion of Ukraine ultimately means for everything from energy prices to monetary policy. And then there\u2019s the case that, historically speaking, stocks tend to recover quickly after being derailed by international turmoil.<\/div>\n

Long-term mindset\u00a0<\/b><\/h3>\n
It\u2019s only human nature to want to sell your investments in a down market. Why? Most of us are risk-averse and want to avoid losing more of our money. However, when it comes to investing, a logical approach and a long-term mindset are required to outsmart the short-term down markets.<\/div>\n
<\/div>\n
Trying to navigate the ups and downs of market returns, investors seem to naturally want to jump in at the lows and cash out at the highs. But no one can predict when those will occur. It\u2019s common investment knowledge to \u2018buy low and sell high\u2019<\/span>. But if investors decide to panic sell their investments because the market has a bump in the road, they\u2019re essentially following the opposite strategy \u2013 \u2018buying<\/span> high and selling low\u2019.<\/span><\/div>\n

Time-tested strategies\u00a0<\/b><\/h3>\n
Managing the volatility of our emotions is more important than the volatility of the markets, which we can\u2019t manage. There are a number of time-tested strategies to help investors deal with market volatility. Two of the most prevalent are: invest for the long-term, and maintain realistic performance expectations when it comes to returns.<\/div>\n
<\/div>\n
By coupling these strategies with maintaining proper portfolio diversification and avoiding the pitfalls of market timing, investors have the foundation needed to help manage their overall exposure to market volatility.<\/div>\n

Historical average<\/b><\/b><\/h3>\n
Historically, the stock market has been up more than down. Often after a lengthy bull market, some investors may lose sight of the fact that their investments could generate negative returns. In order to keep market volatility in perspective, it\u2019s important to maintain realistic expectations about your investments, especially if returns move closer to their historical average.<\/div>\n
<\/div>\n
It\u2019s important to focus on long-term goals and not become distracted by short-term volatility. While losing money in the financial markets is never easy to accept, remember the old adage: Time is on your side. Typically, the longer an investment portfolio is held, the more likely overall positive results are realised. The lesson here is to prepare for the long haul and try not to overreact to periods of uncertainty.<\/div>\n

Focusing on long-term horizons<\/b><\/b><\/h3>\n
It\u2019s <\/span>important not to try and second-guess how the Ukraine-Russia <\/b>events will impact on markets, or<\/span> even attempt to make a bet on them. Instead you need patience and to avoid panicking.<\/span> Focus on your long-term horizons of<\/span> at least five to ten years \u2013 investment periods that have historically fared much better.<\/div>\n
<\/div>\n
When the markets are going down, it\u2019s only natural we are panicked and we fear losing more of our money. We understandably want to take action to protect whatever is left of our investments. Our brains are not wired to accept losses. So, our natural reaction to losses during a market downturn is flight, not fight. Panic selling is driven by fear, market sentiment and<\/span> short-term noise.<\/div>\n
<\/div>\n
That\u2019s<\/span> why sensible diversification \u2013 owning a mix of assets, including shares, bonds and alternative investments such as property \u2013 can help protect investment portfolios over the long term.<\/span> When one area of a portfolio underperforms, another part should provide important protection.<\/div>\n

Investing in the future you want<\/b><\/h3>\n
\n
We understand the impact your wealth has today and for generations to come. That\u2019s why we work with you to help your investments create the future you want. We listen to you and build our service around your vision.\u00a0To discuss your options, please contact us for further information \u2013 we look forward to hearing from you.<\/span><\/div>\n
\u00a0<\/span><\/div>\n
\n
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.<\/b><\/div>\n
<\/div>\n
THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.<\/b><\/div>\n
<\/div>\n
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.<\/b><\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Why investors should take a long-term perspective and not panic On the 24 February the Russian President, Vladimir Putin, ordered a military invasion against Ukraine. A war that many considered unthinkable had begun. Russia\u2019s invasion of Ukraine has sent shockwaves through pretty much every asset class across the globe. But if you are a long-term… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":561,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"_links":{"self":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/560"}],"collection":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/comments?post=560"}],"version-history":[{"count":1,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/560\/revisions"}],"predecessor-version":[{"id":562,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/560\/revisions\/562"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/media\/561"}],"wp:attachment":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/media?parent=560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/categories?post=560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/tags?post=560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}