A road map for investing in uncertain times

Like everyone, we have been stunned by the events in Ukraine. These are difficult and volatile times. In addition to the growing human cost and suffering, the escalating conflict in Ukraine and resulting sanctions on Russia add a new dimension of risk to investment markets. Wars do happen, but infrequently enough to assume the risk of one is slim in comparison to the alternatives. That we can move to the situation we are now in with such rapidity provides many lessons about what is important in investing and in life generally. We hope sense and peace will prevail.

Over time, markets will provide us many opportunities for us not to need to profit from current events. Our main responsibility is to keep a respectful watch over the investments we have made on behalf of our clients, which we continue to do.

The only risks which matter in investing are the ones we do not know about. Once a risk is known about it is, by definition, too late to respond as markets will have discounted it. Once this definition of risk is appropriately considered, the only logical conclusion is to not take excessive risk in the good times, to avoid a permanent loss of capital for investors when unforeseen events occur.

No one knows how the situation in Ukraine will evolve from here, and its short- and long-term consequences may well be profound economically and societally, but this need not mean where we choose to invest on your behalf will change. In many respects situations like the present reinforce, not disprove, the need to have exacting standards, both sustainably and financially, when making our investment recommendations.

Under such conditions, it can be hard to stay focused. But then no one can ever know for sure what lies around the next corner. In our experience, under these conditions the best strategy is to stay invested and stay diversified, so it is important to help clients maintain a long-term perspective and stick to the long-term strategy you have set together. As always, we are here to help guide clients through all market conditions.


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