It is human nature to panic when there is uncertainty in the world. It is normal to be unsure what is next when there is a war lurking in Europe. At least we got that off the table and we are sure about that. It seems in any case as if Russian President Vladimir Putin is not making the headway he had hoped, and that the president of Ukraine is implementing a different strategy which is boding very well for them.
It is still fresh in the memory about what happened to markets in March/April 2020 when Covid-19 announced itself to the world. Our very own JSE All Share Index lost about 40%-35% but recovered in six months’ time and went higher. Imagine selling out of your portfolio when the markets were down early in 2020. The fact is that you have not realised a loss until you switch out of the investment or withdraw from your investment.
Markets have been looking for an excuse to sell off a bit and the invasion of Russia into Ukraine was the perfect platform for that. Our own market has recovered the last couple of days, but that is mainly due to a drive in the resources and commodity sectors.If you have cash on hand, be ready to pull the trigger to invest it. There will certainly be buying opportunities worldwide. Especially in international markets. I’ll recommend getting exposure to fiat currency like US dollars.
Do not, and I repeat, do not shift funds out of your investment portfolio that has taken a hit to more conservative funds. David Shapiro said it very well the other day on Moneyweb. He’s been on the JSE Stock Exchange for 50 years and one thing he knows is that markets always recover after a downfall. Maybe not the way we expect it to or how we are used to, but it recovers.If you are risk-averse, that is fine. You can take part of your pension and buy a guaranteed life annuity.
Tech stocks, especially in the US, have taken a hard hit and will probably take a few more hits, but if I take a 10-year plus outlook, I will still give exposure to those type of funds. There are so many funds you can choose from. You are welcome to contact me if you want to know more about the information given in this article.
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