Science tells us that humans generally follow three pathways when faced with a stressful situation: fight, flight, or freeze. This week, the world materially changed for the people of Ukraine, and investors everywhere are digesting this information. Some are fighting to win and taking action by selling one asset in favor of buying another fund. Others are fleeing the global market, selling their assets and waiting until a period of calm before reinvesting. There are many more who are freezing—throwing their hands up, saying, “There’s nothing I can do.” As your fiduciary, long-term advisor, none of these reactions appeal to us. At CCM, we are disciplined in our approach: absorbing new information, digesting the context of new events, and with experience and focus asking how we can best use the tools before us to fulfill the long-term financial objectives of our clients.
Events like what is happening in Ukraine can roil the market, but the outcomes are not always what one may think. For larger context on what has happened in the S&P 500 Index during and following major geopolitical events spanning around 80 years, you may want to view this chart . That’s why it’s important that during this time we retest our financial planning assumptions to ensure we have included the right allocations to drive success. We listen deeply for evidence that will help us reduce the risk of things we cannot control; we always believe in diversification, and this is proving important once again during this time. At the same time, our Investment Team leverages market volatility to place trades on client portfolios to yield better positions. All of this to ensure we can best support you in achieving your financial goals.
Our team is saddened by the events taking place in the Ukraine. We join clients in our mindfulness, first and foremost, for the people most affected by the invasion. My father’s family came from what was formerly known as the country of Czechoslovakia. Relatedly, I have noted within me a sense of turmoil as I read daily updates about the invasion in Ukraine. And while initial reactions to a crisis involve fight, flight, or freeze, I strongly and firmly commit that CCM is here to instead support you in fulfilling your financial objectives. We did this all this week. We do it every week. It’s our commitment to you.
As always, please connect with us with any questions you may have.
NOTE: The information provided in this article is intended for clients of Carlson Capital Management. We recommend that individuals consult with a professional adviser familiar with their particular situation for advice concerning specific investment, accounting, tax, and legal matters before taking any action.
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