Investing Amid Geopolitical Risk

As we have seen recently with the Russia/Ukraine conflict, geopolitical risk is a very real phenomenon that drives down stock values, because investors fear uncertainty. The uncertainty of how large or small the conflict will be is what makes stock prices so choppy. For example, in March 2020 when the world wasn’t sure how large-scale the pandemic would be, valuations sunk by 28%, but shortly after, they staged the largest and fastest stock market recovery we have ever seen. This was of course, a result of investors realizing that while the virus was a problem, it was not ushering in a zombie apocalypse.

Warren Buffet’s famous quote couldn’t be any truer than it is today that investors should be “fearful when others are greedy, and greedy when others are fearful.” In other words, the time to buy stocks is when they’re on sale, because everyone else is scared to buy them.

With stock valuations being so low because of geopolitical risk, now is a good time to invest more in stocks. It is also a good time to pray for those involved in the conflict. We never want to profit off someone else’s misfortune. What is happening in Ukraine right now is a tragedy and is an example of power wanting more power and absolute power corrupting absolutely. There is a way to invest with a positive impact to help those around the world who are less fortunate. For more information on that, reach out to your financial adviser and ask him or her about investing according to your values for positive impact and solid investment returns.