Worried about the impact of Russian Ukraine concerns and your finances?  Please reach out directly to the Wealth Planning Partners team if you want to discuss your personal financial plan.

So, a little perspective on the Ukraine and Russian situation. This geopolitical event is concerning on practically every level. And there are a wide range of potential outcomes and scenarios. Putting aside views on the way this might evolve, our role is to look at this financially and you are secure. This requires us to avoid prediction and instead use multiple layers of thought.

Want the Good News?

• Your direct exposure to Russia and Ukraine is negligible. We maintain exposure to emerging markets for some clients given the attractive valuations and diversification.  Weightings to Russia and Ukraine are small. Russian companies only account for around 2.8% of the emerging market basket for equities and around 4.1% for bonds. Ukraine doesn’t register on factsheets because it is so small. Perversely, if prices in these regions fall significantly, the expected reward for buying might exceed the risk.  This in turn creates a buying opportunity—but that isn’t the case right now.
• Knock-on effects?  The risks are much more notable, but we do see some offsetting positives. Again, starting with the good news… tensions are pushing commodity prices higher. This has supported sentiment toward energy companies, which have done very well for portfolios lately. We carry a long term, valuation-driven focus in portfolios (preferring cheaper assets) which tend to do well in this kind of environment.. That said, we can’t rule out an exodus of investor money if things deteriorate quickly. Never expect straight lines in markets!  And if negativity really takes hold, it could open a world of opportunity to add undervalued assets to your mix.

Rest assured, we are monitoring this situation closely and hearing from a range of industry experts to understand the impact as it evolves. Ultimately, we are keeping a close eye on any consequential impacts and given everything we know (while acknowledging the unknowable), it reinforces the benefits of a long-term, valuation driven approach. We’re staying in touch with the Morningstar research house to navigate this uncertain period, keeping us all on the path to achieving your goals.

What to do?

If anything changes, we’ll be sure to let you know, but for now we hope you find this touchpoint useful.  In the meantime, it’s usually best to ‘hold the course.’

Please don’t hesitate to contact the Robina office or your adviser directly if you have any questions or issues.  Gold Coast Financial Planners, Amanda Cassar & Mitchell Cassar are here to take your calls if needed.  Contact details here.