Investing in the Wake of the Ukraine Invasion and Market Turmoil:
A Note from West Michigan Advisors
The news has been dreadful as it scrolls across the bottom of your screen. I believe it is fair to say that most people have been on edge since the beginning of the lockdowns from the pandemic until the invasion of sovereign Ukraine. Many investors benefited from a rising stock market, but the financial markets have recently become untethered from the cash-induced bull market of the past two years. What remains is uneasiness, maybe even anxiety. I have never won a lottery, but I can only imagine the sense of euphoria, and the reality of knowing that luck was involved leaves one, perhaps, permanently unsettled. The pandemic bull market has been a little like that. Now comes the seriousness of sound investing.
At West Michigan Advisors, we are monitoring the current situation and have made some individual recommendations when appropriate. We are always available to discuss your plan and your portfolio.
As I approach my fortieth anniversary of market experience, perspective on money and investing is one thing I feel I can share with you today. My career spans four decades. From the end of the Carter
Administration to the Biden Administration. From high inflation and interest rates to the low-interest rates and the rising inflation of today. I have seen stock market crashes and corrections, but more importantly, I have witnessed mass wealth created. These decades have included good times and bad with profound reformations to the world’s financial system. Through these decades, there has been one constant: the long-term investor has been rewarded for patience and perseverance through the multitudes of financial market turmoil. I do not see that changing.
The long-term investor has surely been rewarded. In August of 1982, the S&P 500 stock index stood at 103.85. As of 11:35 am on February 25, the index is at 4,358.18.
I know what you are thinking: “isn’t it different this time?” I have heard that question asked multiple times per year for forty years. It is always different in one way or another. We debate how dark that cloud is on the horizon, but maybe, just maybe, that cloud seems to stay on the horizon while we go about our day-to-day. Indeed, investors who patiently acquire common stocks have ignored those clouds.
Finally, we know it is tempting to engage in trench warfare against the high-speed traders, the AI trading programs, and the soulless hedge funds that battle for profits every day. At WMA, we advise staying above this boiling vat of vipers and sticking to your plan, patiently biding your time to slowly take advantage of market opportunities when high-quality companies go on sale. That is a strategy that has worked consistently over time.
I could list a litany of potential problems for the markets and the economy to overcome. I have written this before, but I believe it bears repeating. “Our history is filled with dire times and little hope, but hope remained alive. We nourished hope with pragmatism and optimism, and ultimately, America prospered once again.” I still believe this and hope you do as well.
On behalf of West Michigan Advisors, we welcome your questions and comments. Feel free to call our office at (616) 820-1040. I or a team member would be happy to talk about how world events affect your financial future.
Kevin H Clark
Managing Partner, West Michigan Advisors