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The Kilkenny Observer Friday 04 March 2022
kilkennyobserver.ie
Your Money
The Ukraine crisis and your investments BY JOHN ELLIS FINANCIAL ADVISOR
I’M sure every financial advisors email has been flooded with the views of the various institutions on the Ukrainian crisis. And, as people scramble to make sense of the upheaval, much current guidance will become nearly immediately outdated being replaced by new advice as the saga unfolds. Areas of concern included inflation; before, the hope was that as Covid related supply chain issued normalised inflation would reduce. But, now, with the spike in energy costs, even though we don’t import gas from Russia, there will be a significant hit on top of already raised prices. The price of oil was more than $100 a barrel for the first time since 2014 but as it seems the Russian energy industry — the second largest producer of oil and gas globally, providing 40% of Europe’s gas supply — is unlikely to be sanctioned the price has come back down. There has been an immediate impact on financial markets, with risk assets being sold off and a move
toward government bond markets. European equity markets at time of writing were down close to -5% and US equity market down about -2%. But US equity markets rallied aggressively in late US trading after President Biden announced less severe sanctions than were anticipated. This trend will continue with
increased volatility for the foreseeable future. Government bonds are in favour again especially inflation-linked bonds. One insurance company confirmed de-risking their portfolios and taking on larger position in bonds. According to some commentators Central Banks will
be unable to materially raise interest rates to combat inflation for fear of causing significant harm to economies and to jobs. Gold pushed past €1,700 an ounce but is back at €1,670 and will eventually find a new trading range. It is likely to put initial public offerings (IPO) and
large merger and acquisitions already struggling against market turmoil on the back burner. While on the other end of the risk scale Bitcoin plunged to as low as $34,778, the lowest level since 24 January. Kevin Quinn, Chief Investment Strategist with New Ireland, said: “The escalation of the crisis in Ukraine into conflict will hamper markets in the near term and we are experiencing its effect across the asset classes. However, once it is contained and doesn’t result in Western military engagement its market impact should prove short lived. It may add to the inflationary pressures that the ECB is facing as energy prices could be impacted for longer than had been hoped.” In the light of this what should we do with our current investments.? Many people find financial decisions and financial planning quite tricky at the best of times but in a crisis situation it can be worse and often are put off or “flee to cash”. Although there is likely to be a cost, a conversation with a financial adviser would give you good ideas about where to start. The first thing to do is remember that staying invested in a diversified, goals-aligned portfolio has paid off through
countless crises, wars, pandemics, and recessions, and will likely continue to do so. This is not the first time Russia has been the cause of market upheaval. Going back to the Soviet invasion of Afghanistan, six instances of Russian aggression can be identified and in all, but the 2008 invasion of Georgia, occurring during the fthen inancial crisis, stock markets showed strong gains over six and 12 months later. In a previous column wIadvised you have a formal, written investment policy or allocation guideline for your entire portfolio. We advised at outset commit to a disciplined investment plan. We advised establishing objectives (for example: retirement planning, education, a holiday) and your time frame. Finally establish your willingness to take risk, sometimes called ‘risk attitude’ or ‘risk preference’, your financial ability to take risk, or ‘risk capacity’ and your need to take risk. By having this policy in place your decisions are less likely to be swayed by emotion and will cut down on impulsive decisions especially during stressful times. So, stick to it! John@ellisfinancial.ie 086 8362633
Coping with grief ANDREW MCDONALD HYPNOTHERAPIST
THE SADNESS of a loved one’s passing is an unwelcome visitor for all of us at one time or another. The cycle of life dictates that those we cherish will eventually leave us, or us them. Just as there are countless ways this can happen, there is a myriad of ways of coping and moving forward, no matter how difficult that may be. Of great importance is the recognition that everyone grieves in their own way. Equally fundamental is understanding that no expression or manner of grief, as long as it remains respectful, is wrong. For some, tears come immediately, others find solace in remaining stoic. Whilst many people find comfort in staying with the body, for others this can be so overwhelming it threatens the wiping of happy memories. Although it can be difficult, try to understand that
just because somebody might act very differently to you, this doesn’t mean their pain is any greater or lesser, it’s just different. Particularly if you were extremely close to the recently deceased, you may find relatives and friends are reluctant to leave you alone. Even these acts of kindness can feel like too much because you need moments of solitude to process your thoughts and emotions. Don’t be afraid of saying that you need some space to be by yourself. Throughout our lives we are told to use our heads over our hearts. To be rational, not impulsive. Calm, rather than emotional. Grief is a time when the opposite is true. Emotions are high and raw. Burying thoughts and feelings risks intensifying them only for them to explode later. Don’t be afraid to express how you feel and use opportunities to talk to others who can help you. There is an old saying “what soap is for the body, tears are for the soul”. If you feel like crying, do so. It is not a sign of weakness. It is a
normal human reaction to sadness. Revisit memories at your own pace. For some, burying themselves immediately in thoughts of the past contributes enormously to their coping with and recovery from grief. For others, remembering happy times can only intensify the pain. The same is true when sharing stories with others. Trust what feels right for you. Be prepared that grief has a habit of returning at different times, sometimes unexpectedly. This doesn’t mean that you should live the rest of your life looking over your shoulder. Simply put, it signifies that you may feel you have dealt with your mourning only for something to send you back to square one. This too is perfectly normal and not something to feel afraid of. In fact, it can be a great reminder of how much love you shared with the person you miss. Grieving is a long, hard journey. At times, it will seem endless. However, you can and will rediscover purpose in life.
