John Ellis

The Ukraine crisis and your investments

BY JOHN ELLIS

FINANCIAL ADVISOR

I’M sure every nancial advisors email has been ooded 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 And, as people scramble to make sense of the upheaval, much current guidance will become nearly immediately outdated being replaced by new advice as the saga unfolds.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 in ation; before, the hope was that as Covid related supply chain issued normalised in ation would reduce. But, now, with the spike in energy costs, even though we don’t import gas from Russia, there will be a signi cant hit on top of already raised prices. e price of oil was more than $100 a barrel for the rst 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. ere has been an immediate impact on nancial markets, with risk assets being sold o 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. is trend will continue with increased volatility for the foreseeable future.

Government bonds are in favour again especially in ation-linked bonds. One insurance company con rmed 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 in ation for fear of causing signi cant harm to economies and to jobs.

Gold pushed past €1,700 an ounce but is back at €1,670 and will eventually nd a new trading range.

It is likely to put initial public o erings (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: “ e escalation of the crisis in Ukraine into con ict will hamper markets in the near term and we are experiencing its e ect 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 in ationary 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 nd nancial decisions and nancial planning quite tricky at the best of times but in a crisis situation it can be worse and often are put o or “ ee to cash”. Although there is likely to be a cost, a conversation with a nancial adviser would give you good ideas about where to start. e rst thing to do is remember that staying invested in a diversi ed, goals-aligned portfolio has paid o through countless crises, wars, pandemics, and recessions, and will likely continue to do so. is is not the rst time Russia has been the cause of market upheaval. Going back to the Soviet invasion of Afghanistan, six instances of Russian aggression can be identi ed 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 nancial 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@ellis nancial.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. e 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 di cult 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 nd solace in remaining stoic. Whilst many people nd comfort in staying with the body, for others this can be so overwhelming it threatens the wiping of happy memories. Although it can be di cult, try to understand that just because somebody might act very di erently to you, this doesn’t mean their pain is any greater or lesser, it’s just di erent.

Particularly if you were extremely close to the recently deceased, you may nd 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. roughout 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. ere 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. e same is true when sharing stories with others. Trust what feels right for you.

Be prepared that grief has a habit of returning at di erent times, sometimes unexpectedly. is doesn’t mean that you should live the rest of your life looking over your shoulder. Simply put, it signi es that you may feel you have dealt with your mourning only for something to send you back to square one. is 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.