Russia Invades Ukraine – Will It Affect Your Investments | News or Noise
Russia invaded Ukraine and the US and its allies are issuing sanctions against Russia, sell my stocks! No, Please, don’t do that!
I’m Chris Perras, Chief Investment Officer with Oak Harvest Financial Group. And This is our investment team’s mid-week release when we examine a news item, headline, or story making the rounds from publicly available sources and ask, “Is it News or Noise?”
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First, off, viewers, let me be clear, I am not one bit dismissive of the horrible events transpiring in Ukraine, and Russia and Eastern Europe. My thoughts and prayers go out to families on both sides of the border who have been brought into this horrible event by the powers to be, beyond their control. Viewers, this discussion will be focused on what it might mean for your money and the markets.
Viewers this is news for many of your portfolio holdings. Why? Not for the reasons you might think. Why? Because most individuals would believe that wars and conflicts were negative to the overall markets. And while historically, they have initially contributed to higher short-term volatility, over longer-term investment time horizons measured in months and years. Historically, they have been peak bearish events and led to large and longer bull market moves.
So, here’s some data on military conflicts and their outcomes on the overall stock markets. The first set of data and charts were published by Tom Lee’s group at Fund Strat. Historically, the last 5 “invasion” conflicts from the Vietnam War through the Crimean Crisis, on all 5 occasions, the overall stock markets rallied on the invasion. We have the charts and graphs here from Fund Strat.
Viewers, please recall your history books. The phrase “it is darkest before the dawn” is used so often, it’s become a cliche. But viewers I remind you that World War 2, and more specifically the days after the Pearl Harbor bombing was the beginning, not ending of a multidecade bull market. Our markets bottomed a few months after Japan attacked Pearl Harbor and rallied over 130% over the next four years. Definitely, a contrary move relative to the vast majority of investors emotions and mindset.
I’m not saying this is World War 3. I am not an expert in political science any more than I was an expert in virology during the Covid pandemic. Nor am I saying that these are the markets precise lows for the year. However, I am saying that based on history and human behaviors in finance and the markets, there is a good chance we are marking the lower region for the SP500 for the first half of the year. Just as we did during prior conflict periods. Why could this happen for a 6th time the last 55 years? Tune into this Fridays YouTube release of “keeping you connected to your money – Stock Talk Podcast “and we will get into a lot more detail on this subject. For now, this story on Ukraine and Russia is perversely, historically bullish in terms of forward market moves in terms of months and quarters.
From the whole team at Oak Harvest, our thoughts and prayers go out to those who are suffering from this terrible act of aggression. To clients, thank you for your support and trust throughout 2021, and we hope we can continue to be your partner and provide you with value added service in 2022.
And Viewers, feel free to give us a call here to speak to one of our advisors. Let us help you craft a financial plan that meets your retirement goals and needs first, and your greed’s second. Call us at (877) 896-0040 we are here to help you on your financial journey into and throughout your retirement years.
From everyone here at Oak Harvest have a great week and enjoy the return of the Houston rodeo and livestock show!
News or Noise: News!
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Russia invaded Ukraine and the US and its allies are issuing sanctions against Russia, sell my stocks! No, Please, don’t do that! First, off, viewers, let me be clear, I am not one bit dismissive of the horrible events transpiring in Ukraine, and Russia and Eastern Europe. My thoughts and prayers go out to families on both sides of the border who have been brought into this horrible event by the powers to be, beyond their control. Viewers, this discussion will be focused on what it might mean for your money and the markets.
