These are unsettling times for investors. Even before the geopolitical crisis involving Russia and Ukraine, the financial markets were facing headwinds due to higher inflation, the anticipation of rising interest rates and the continuing effects of the pandemic. As an individual investor, should you take some type of action?
It’s helpful to put today’s headlines in perspective. While the Federal Reserve probably will raise interest rates, they are doing so from a point where these rates were at or near historic lows, so the new, higher rates may not drastically deter businesses from borrowing to expand their operations. Also, higher interest rates can be good for savers, who can earn more on their savings. As for inflation, many economists expect it to cool down in the second half of 2022 as supply chain bottlenecks start to clear. And the pandemic’s effects, both on our health and on our daily lives, may be fading, though, of course, we all should be cautious when it comes to making predictions about COVID-19.
The Ukraine situation is one more unpredictable event – and one thing that financial markets dislike is uncertainty. Russia is one of the world’s largest oil producers, so a conflict that could affect oil prices can have a ripple effect on many market sectors. Until the state of affairs in Ukraine calms down, market volatility may continue.
Even in this context of uncertainty, though, investors shouldn’t lose sight of other factors that can affect the investment climate. The U.S. economy has been growing at a fast clip, and corporate earnings – usually a key driver of stock prices – have also been strong.
In any case, instead of reacting to external events – negative or positive – you’ll help yourself by pursuing an investment strategy based on your goals and risk tolerance. Sticking to that strategy will be easier if you follow these steps:
We’re living in challenging days. But instead of agonizing over things you can’t control, concentrate on those that you can – such as making investment choices appropriate for your needs and capable of helping you meet your goals.
Brian Conrad is a certificated financial planner and financial advisor with Edward Jones. His office is located at 479 Jumpers Hole Road, Suite 202, in Severna Park. To learn more, call 410-544-8970, email email@example.com or visit www.edwardjones.com/brian-conrad.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Edward Jones. Member SIPC.
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