Ukraine’s Invasion: Impacting The Capital Market State

Clients and friends,

We find ourselves facing strange, surreal times. The bottom line is that international conflicts like the Russian invasion of Ukraine have a ripple effect across the globe, in a myriad of ways, for so many of us. Our thoughts are with all who are affected.

For the purposes of our discussion today, we’d like to touch on the capital market implications of these alarming events. While we can count on uncertainty during such challenging times, history shows that the financial trade industry has faced these situations many times through the years and has always managed to eventually recover. A few major trends of note include:

  • A generalized slowing of economic growth and increased inflation pressures;
  • A rise in risk premiums due to the extent of global economy sanctions and supply chain disruptions;
  • The potential for global commodity price increases and stock shortages; 
  • A high degree of volatility in equity markets;
  • Stability in and a resulting increased demand for bonds (in the short-term);
  • The providing of a “safe haven” by assets like the U.S. dollar and gold.

If you’re interested in reading a more detailed commentary on the subject from Mackenzie Investments, please click Here. The overall takeaway from the article is to adhere to the “Golden Rule” of investing: stick with your portfolio should it still reflect your long-term goals and wider planning.

If you have any questions, we’re always here to chat. Until then, take care.

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