The ongoing Ukraine conflict has had a significant impact on global financial markets and the value of investments. While it is difficult to predict the exact outcome and duration of the conflict, there are several strategies investors can employ to protect their investments during this uncertain period. Here are some suggestions:
Protecting your investments during the Ukraine conflict and beyond
By Charles Hutchinson
This article is published on: 18th April 2023
1. Diversify your portfolio: One of the most important strategies for protecting your investments during a period of geopolitical uncertainty is to diversify your portfolio. By investing in a variety of asset classes such as stocks, bonds, commodities, and real estate, you can spread your risk and reduce the impact of any one investment being affected by the conflict.
2. Avoid investments in affected regions: If you are concerned about the impact of this conflict on your investments, it may be wise to avoid investing in companies or industries that are directly impacted. For example, companies that do business in Ukraine or Russia, or companies that rely heavily on imports or exports from these regions, may be more vulnerable to a serious and sustained downturn.
3. Consider safe-haven assets: During times of geopolitical uncertainty, investors often flock to so-called “safe-haven” assets such as gold, US Treasuries, and the Swiss franc. These assets are generally considered to be less risky than other investments and, depending on wider market conditions, can provide a hedge against volatility.
4. Keep an eye on news and developments: It is important to stay informed about developments which may affect financial markets. By keeping a close eye on political and economic news, investors can make informed decisions about their investments and, if necessary, adjust their portfolios accordingly. Note that becoming overly reactive to short term events will usually be counter-productive, but staying informed will also often present valuable opportunities for tactical portfolio adjustments.
5. Take a long-term view: While it can be tempting to react to fluctuations in the financial markets, it is important to remember that successful investing almost always relies on patience and taking a long-term view. Rather than trying to pre-empt short term market direction, it is often more prudent to focus on your long-term investment strategy and stick to your plan.
6. Consult with a suitably experienced financial adviser: If you are uncertain about how to best protect your investments, it may be helpful to consult us. A professional adviser can help you navigate the complexities of the financial markets and provide personalised advice based on your individual goals and risk tolerance.
Points 1 to 4 above are actually the responsibility of the fund managers whom we select for their prowess, long term performance and consistency. It is their job to navigate your investments through uncertain times. Point 5 is vital and it is important to remember the adage “It’s not timing the market, but time in the market, which matters”.
In conclusion, the ongoing conflict in Ukraine presents a challenging environment for investors, but there are strategies that can be employed to protect investments. By diversifying your portfolio, avoiding investments in affected regions, focusing on safe-haven assets, staying informed about the latest developments, considering the long-term and consulting with a financial adviser, you can help protect your investments during this uncertain period.