- 24th February 2022
- Posted by: Celticfp
- Category: Investment Committee
Sadly, due to events in the last 24 hours we thought we would reach out and provide some commentary on the crisis in Ukraine, unfortunately the situation has worsened with the invasion by Russian forces, this uncertainty has caused stock markets around the globe to be impacted.
Our thoughts of course go out to all the families in Ukraine facing an uncertain time, this extends to relatives across the world who must be nervous about their safety.
Chris Bailey, our head economist, has provided some thoughts below…
“Geopolitical issues are becoming more important, because how can you understand economy if you don’t understand geopolitics?” – Nouriel Roubini
The investment world is complex, and even the best thinkers miss opportunities and make mistakes. But never believe in anyone who places material value in hindsight thinking. After all, the key is not what you predict, it is how you react.
It is very sad to read today’s latest update from Ukraine, even if many of us may have spent much of recent days and weeks appraising the latest updates on TV, in newspapers or online. There are still many uncertainties despite many other nations threatening massive retaliatory sanctions against Russia, although China – the world’s leading emerging market economy – refused to condemn Moscow.
Geopolitical matters are never positive, because it means all economies are impacted, even if we live in a nation that is not impacted directly by military events. Firmer oil and gas prices have been driven in the last 18 months by many factors, but unsurprisingly this has impacted again further today impacting costs and inflation all around the world with business, supply and day-to-day life impacts for us all.
Over time, geopolitical angst very, very rarely make a 21st century country sustainably richer or more powerful. A combination of improved trade, heightened education, improved health care and general democratic progress is the best combination to make a country richer and its citizens happier. This is why the world has seen far fewer wars and coups compared to a few decades ago. And this is why global investment markets have made a lot of progress – to the benefit of all our pension funds and savings – over the last thirty years.
I remain optimistic about the future despite geopolitical uncertainty. The world is never straightforward but – as we have seen with COVID-19 matters – from times of challenges, progress can be made. Fortunately, as the 2020s progresses, I believe more ordinary citizens around the world will realise this. As for investment markets, they always go up and down but – fortunately – improvements occur over time. So do not be too pessimistic. It is always better to be glass half full and not glass half empty.
Celtic Financial TV
Every month you can now watch a short market update with our head economist Chris Bailey on YouTube, simply head over to Our Channel – here you can watch our market update archive.
This article is for information purposes only – should not be perceived as financial advice. We recommend you should always speak to a financial adviser before making any investment decisions.
Please note, past performance is not a reliable indicator to future returns. Your investment may fall as well as rise and you may not get back what you put in.