The events in Ukraine over the last few weeks have left many of us speechless. We haven’t seen a land invasion of this kind in Europe since WWII. Many clients and investors are grappling with how to handle their investments given the conflict; many worry of the effects if the conflict broadens. Here are some facts to consider that may give you some reassurance during this time:

  1. Even in wartime, the economy continues (ie business still have to produce goods and services). People still need to eat, go to the dentist, drive around their city, and so forth. Many businesses can still operate during a wartime.
  2. If the conflict stays contained to Russia/Ukraine – all of our clients have less than .25% (or .0025) of their portfolio in Russian/Ukrainian assets. See this post for more info: https://verisail.com/20-second-advisor-how-much-exposure-to-russia-do-you-own/
  3. Looking back to WWII, returns for the S&P 500 looked like this
    • 1939: -.4%
    • 1940: -9.8%
    • 1941: -11.6%
    • 1942: 20.3%
    • 1943: 25.9%
    • 1944: 19.7%
    • 1945: 36.4%

So, an investor in the S&P 500 would have realized a 6.3% average return during WWII if they stayed invested during the entire war. Past performance is not indicative of the future, but it tells an interesting story. If investors run for the exits during times of uncertainty (ie the beginning of WWII), then they often miss out on the returns that follow in subsequent years (ie look at the returns 1942-1945).

We continue to hope for a ceasefire and peace in Ukraine. We also have no ability to predict the future. Investors who can stay invested during times of uncertainty are positioned to capture returns when markets perform well.

Posted in History, Interesting, Investments

Leave a Comment