03/15/2022
The Russian invasion of Ukraine now enters its third week of conflict.
◼️ The economic implications of the war have exacerbated already strained economic conditions around the world.
◼️ Inflation, which was present before the war, continues to rise, with oil being the most influential factor.
◼️ Sanctions against Russia, the third largest producer of oil globally, could cause a supply imbalance which would result in higher gasoline costs to consumers and higher input costs for manufacturers.
At the same time, the Federal Reserve is trying to curb inflation through monetary policy.
Will the Fed be able to produce a soft landing—where inflation is moderated, and growth sustained? Or will the Fed push too hard against inflation, which combined with the uncertainty of the war, results in a drastic growth slowdown or possibly a recession? These are some of the questions we wrestle with daily.
Practically, what measures should we consider? Diversification is a key strategy and includes exposure to growth and value stocks, as well as other assets that provide protection against inflation.
Finding your appropriate level of portfolio risk is one of the most important steps to successful investing.
