What’s going on in Ukraine? 

The largest mobilisation of forces in Europe since 1945 is under way, with the Ukrainian soldiers Army confronting a Russian invasion on many fronts, supported by Western weaponry and logistical supplies. 

Most global leaders have publicly condemned Russian President Vladimir Putin’s decision to invade Ukraine as unjust, and have imposed significant sanctions, to encourage his nation to cease what is widely considered to be an unnecessarily aggressive action against a peaceful Ukrainian population, and a threat to its democratically-elected sovereignty and independence. 

Cognisant about the implications of a further escalation for the rest of Europe and, indeed, the world, Western leaders have frozen the assets of Russia’s central bank and a number of others, worth billions of dollars, and barred Russian entities from transacting globally using the international SWIFT financial messaging system.  

Wealthy individuals linked to the Russian state have also been sanctioned and barred from travelling to Western countries, with high-profile seizures of assets harbored abroad ranging from half-a-billion-dollar super yachts to stately homes in the south of England worth millions of pounds.  

Major Western brands from McDonald’s to Apple have also ceased their operations in Russia, and a ban has been imposed on importing Russian luxury goods like diamonds and vodka into the UK. 

Further measures are expected to follow, including a potential widespread ban on importing Russian oil. 

All aimed at forcing the Russian government to take stock and cease a war which is having desperate humanitarian consequences, with over a thousand civilians reported to have been killed so far, and millions displaced to other countries as refugees. 

How does this affect the global economy? 

Markets are programmed to take flight at any sign of instability and the recent escalation of fighting in Ukraine sent shockwaves across trading floors and global stocks into disarray. 

In the month to 14 March, the FTSE 100 share index fell 4.72 per cent, temporarily wiping billions off the value of Britain’s largest corporations. In fact, the Ukraine conflict promoted the blue-chip index’s lowest weekly performance since the COVID-19 outbreak in March 2020. 

Oil giants Shell and BP, both directly affected by the crisis – with BP forced to offload its 20 per cent stake in Russian oil company Rosneft and Shell under significant public pressure to cease importing Russian oil – were among the index’s biggest drags, despite the fact that oil prices extended their recent climb to around $115 per barrel. 

Meanwhile, the American Dow Jones Industrial Average index has also seen major dips and rises, with a 4.21 per cent loss over the past month. 

However, there have also been positive responses in Western exchanges, to announcement of strong and decisive counter-actions taken by the Western alliance of nations, and we will likely continue to witness a rollercoaster ride of ups and downs as the twists and turns in the conflict provoke positive and negative responses from the various global exchanges. 

Meanwhile, the value of Russian assets has been sent spiraling by its increasing isolation from global markets, as well as growing negative perceptions of its ‘brand’ internationally. 

The Moscow Exchange declared that all markets would be closed on March 5, 7, and 8. And, since Moscow Exchange’s equity trading was banned, Russian stocks traded in London have lost more than 90 per cent of their value. 

There is no doubt that finance is playing an unprecedented role as an alternative a weapon of the West, in trying to influence Russia to cease its actions and agree a ceasefire 

What does all this mean for my investments? 

Our Director and Charted Financial Planner Wayne Audsley explains how this will affect your personal investments, and what to do going forward: 

“It’s unsurprising that there is uncertainty among investors at the moment and we have never seen markets play such an active role trying to managing a conflict before. 

“On top of everything that is going on in Ukraine, the Bank of England’s base rate is continuing to rise, along with the cost of living and energy prices, so anyone could be forgiven for feeling a little unsettled at the moment” 

You can find out more about how to manage the effect of these price rises on your finances here. 

“My advice, as usual, is to keep calm and carry on. Even with everything going on in the world at the moment, you need to focus on the medium to long-term future of your investments.   

“Volatility, believe it or not, can be beneficial. There is a greater range of possible outcomes when there is some volatility because as the downside grows, so does the potential upside. 

Put simply, if you are saving regularly into your pension or stocks and shares ISA, for every month in which you purchase your units more cheaply because of what’s going on, you’re adding more potential for future gain when their value springs back, as it inevitably will eventually. 

“The worst thing an investor can do is allow their emotions to get the best of them. Remember the golden rule of investing is consistency over the long term. Don’t be tempted to sell off your investments due to short-term dips in their value – in fact, if you can afford to, buy more!” 

If you’re asking yourself questions like these and would like to arrange a free, no-obligation initial appointment to take a fresh look at your financial health and your options for everything from your pensions to your investments and the insurances you have in place, email us or call (01482) 860700 

This blog is intended to provide readers with viewpoints, opinions and inspiration regarding options they might want to consider. It is not intended to be taken as advice and we strongly recommend seeking professional financial advice before taking any action.