The politico who uttered “never let a good crisis go to waste” might have been onto something.
This is not to sound insensitive to Ukraine and all victims, but without an impending U.S. recession, credit crunch, dividend cuts or an explosion of bad debt, there is little reason for portfolio pessimism. Unless you invested in a Russian-themed exchange-traded fund or maybe an emerging markets index fund, the destruction of Moscow’s capital markets is a sideshow.
True, there are other perils. Oil and grain prices are spiking, but the United States is the top producer of oil, as well as many of the commodities that Russia may no longer export widely. The dollar gains global trust and value with each new act of aggression. Inflation is hard and may get worse, but there are ways to shore up your investments.
On the plus side, the war and oil shock ease fears that the Federal Reserve might strangle growth by tightening credit too much. U.S. long-term interest rates are not rising much more than they already have. So, while your bonds and bond funds are down early in 2022, they are priced to do no worse than break even now.
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