Weekly Thoughts 11 March 2022

Quite a few clients have asked me about their investments and the Ukraine war and what do they do and do we worry. Well, to begin with, there is nothing that we can do. Plus the problems and trauma of the little Ukrainian boy, shown multiple times on news channels earlier this week, walking along by himself crying, are far worse than our problems.

Yes, market values have dropped quite a bit and might go down further. But there is no point disinvesting. What do you do then? Lend your money to someone else by putting it in the bank and then investing again when markets have got back to values above what they were when you came out? Then you lose.

The world has survived wars before. Stock markets have survived wars before. Consumer goods and the stores that retail them will survive…. because people will still buy plasters and food and toothpaste and shop at Pick ʼn Pay and Spar and Tesco while this is going on and long after it’s over.

But I have read a lot about what fund managers are saying. Last week I phoned a Marriott fund manager directly to ask him what he thought:

“Kev,” he said, “We don’t hold any direct stocks in Russia. Yes, the oil price is a worry (travel less and drive 10km/h slower – Ed) because the consumer might have less money for spending. But basic necessities will continue and defensive stocks (like toothpaste and plasters and food) will be more relevant. We expect global interest rates to go up, but in the long term, there is no need for panic.”

Growth manager Orbis has a 2% exposure to Russian shares – so this portion might take a knock. Foord feels their funds were already defensive and have coped OK so far, and many other managers are saying they remain vigilant to try and manage the volatility as best they can.

So, over the long term, the world will bounce back. In one way, it’s a time to invest now when markets have gone down. And as I’ve said…. Our problems are nothing. Just look at what they’re living through. We have potholes to dodge. They have hunger and missiles and homelessness and death.