Don't Panic: Ukraine, Inflation, and the Fed

There is plenty to worry about these days.

Top of mind is the conflict between Russia and Ukraine, and the possible energy and economic disruptions that may follow. Closer to home, high inflation persists, and the Fed is preparing to tighten monetary policy.

While Covid is moving away from the front page, the markets have a lingering worry that another variant could emerge. Before long, the midterm elections will begin making headlines as well, as candidates take positions.

Add it all up, and you see the S&P 500 teetering on correction territory as some investors ponder the best way to ride out the next few months.

If you’re worried about the financial markets, please reach out. At Deschutes we understand that current events can be a bit overwhelming, and you may feel the need to be proactive. But remember, we created your financial strategy based on your goals, time horizon, and risk tolerance, and we anticipated there would be unsettling events along the way.

Our Chief Financial Officer Mark Corcoran notes,  "When this conflict resolves, we will return to a largely positive, post‐COVID world. The majority of U.S. states have already abandoned mask and vaccination mandates. Earnings estimates have not participated in the price correction of indexes. Economic activity is quite sound, as are personal and corporate balance sheets and credit. It may be difficult, but we encourage our clients to look longer term, beyond the Russia‐Ukraine conflict. Current estimates are that global GDP may be affected by about 3%, which means 97% intact. It is true that conflicts like this derail rational thinking and long‐term plans, but more successful in the long term will be those who stay the course with their investment plans. As we saw late last week, upside to this conflict vs. expectations translated into strong equity and risk asset rallies."

 If you need advice from a professional, please don't hesitate to reach out to our team for a consultation info@deschutesinvestment.com