The news about the Russia invasion is, in my opinion, certainly spells tragedy for many in Ukraine. I don’t know how it made you feel but I watched the scenes of exodus, war and violence with a mixture of dread and gratitude.

It’s certainly a worrying time for those who are trying to get to safety in Ukraine and I feel for those who are stuck. My heart goes out to the families who are in this position.

I’m hugely grateful however that I live in a country where it’s massively unlikely that I’ll ever have to pack my belongings up quickly and flee from everything I know…a privilege of birth I don’t take for granted.

The reason I’m writing this blog however is not to talk about Ukraine and Russia, there’s plenty of people way more qualified than me to inform you on this, but to talk about the current short-term impact on markets.

Now, if you’re a client of mine, you would have heard me banging this drum for some time. So, I’m sorry I’m going to repeat this but it’s an important message. Part of the value we add is making sure we remind you of what’s important and this includes every now and again reminding you that “This too shall pass”.

If you haven’t worked with me directly but you’re receiving this email as one of Cervellos professional connections, I hope this is beneficial when thinking about your own financial plans or thinking about how you communicate with your clients.

So, let’s talk about what’s going on with markets and how you should react to the current volatility…

The short answer is “Do Nothing”.

The long answer hopefully provides a bit of context…

I’ve worked as a financial adviser and planner for over 20 years and have run my own business for over a decade. In this period our world has been impacted by some pretty momentous events.

We’ve had terrorist attacks, wars, market bubbles, a global financial crisis, pandemics and more.

If we zoom out a bit further (you can see the longer-term view here) to, let’s say, a 120 year view, there’s plenty which has happened in this period, including world wars, the 1929 market crash, an oil crisis, black Monday and much more in this period of history.

Many of these things have had a short-term impact on stockmarkets, however during this period the longer term trend has always been up, even if there are periods where the markets feel a bit shaky.

Now, if you’re a client of mine we will have already had a decent in-depth conversation about risk, volatility and making sure you’re comfortable when the inevitable ups and downs occur.

We’re currently in one of these periods of short-term volatility but it’s important to be clear…

Your financial plan should always be focussed on the best longer term strategic decisions. The portfolios we recommend are designed to do that. The worst thing you can do is make any changes when the world is in flux…

So, my only recommendation now when it comes to your own financial plan is to understand that world events which impact markets will happen throughout your life. 

The only thing we can control is how we react…and the best way to react, when it comes to all of our financial plans, is not to panic.

During the 1^st lockdown nearly two years ago now markets had another wobble. At the time I was personally and professional coping with a few new experiences.

We’d closed the office and all of the Cervello team were working from home. Investment markets at that point in time were also experiencing a bit of volatility. My attempts at home schooling an 8 year old were failing.

Part of my responsibility as your financial planner is to make sure I’m here when you need to talk but during lockdown one I decided to be proactive and make some calls to existing clients, the ones who I felt needed reassurance, making sure they were Ok.

As we were in Lockdown, some of these calls were overhead by my two daughters, Sophie and Charlotte. 

They thought it would be amusing to write some of the phrases I used on the phone with clients on a tally sheet and record how many times I said the phrase. At the top of the sheet, they put the phrase “Dad Bingo”.

After about a month they attached this sheet to the Fridge and revealed the phrase I used the most. This phrase was “This too shall pass”…apparently in my efforts to ensure people made the right longer term financial decisions I used that phrase quite a lot!

Where markets were concerned the volatility did pass and between the middle of 2020 up to the end of 2022 markets had a significant growth spurt effectively meaning that anyone who didn’t panic made the right choice.

This choice, of doing nothing when volatility occurs, has been shown to be the right one for many years and continues to be so.

I haven’t got a crystal ball. I don’t know what’s going to happen in Ukraine, although I do hope any resolution doesn’t include needless loss of life and injury.

I do know however that the likelihood of you achieving your financial goals is going to be increased by not reacting when markets are volatile.

I am, as always, here to help. So feel free to give me a call if you’d like to talk anything through…