Investment strategies to secure your assets during the Russia-Ukraine conflict
In light of the ongoing clash between Ukraine and Russia, a lot of day-to-day factors have been affected all over the world. The financial element has noticeably been impacted in more than one way. So how does an investor safeguard assets during such unstable circumstances? Read on to learn all about investment strategies that help you keep your assets safe amid the ongoing crisis.
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For many Australians, the financial consequences of the Russia-Ukraine crisis have been tangible, with rising petrol and shop costs, and worldwide stock market declines. Understandably, many retirees are concerned about what this means for their retirement savings. However, while certain pensions may suffer as a result of these external market issues, earlier downturns, such as COVID-19, have shown that markets do recover over time. For many people who have seen a drop in their retirement funds, remaining calm and waiting out the storm may be the best option.
According to Ex-Minister Hon. Josh Frydenberg, Australian superannuation funds have minimal exposure to Russian investments within its $3.5 trillion superannuation system; however, the Australian economy is very well affected by the ongoing conflict.
Tips to safeguard your assets during the Russia-Ukraine conflict
#1 Opt to limit high-risk investments
Given the possibility of a recession as a result of the conflict, now may not be the best moment to take big risks with your investments. At this point, the most important strategy is to play it safe, which means avoiding business with excessive leverage and speculation.
#2 Spend on consumer goods
Given the uncertainties surrounding the currency's direction, it's important to remember that Russia is one of the world's largest distributors of oil and gas, with a substantial impact on the pricing of most goods. As a result of consumer products not changing in their consumption, it might be a good idea to moderate the odds by dealing with more consumer goods rather than other assets whose values fluctuate over time.
#3 Diversify your portfolio
Placing all your resources in one place could end up costing you a lot more money.Do not commit all or a substantial portion of money into one industry, particularly the money market which is quite volatile, as you could lose your entire investment. Diversify across different businesses because the course of events is unpredictable. This will help shield you from loss if the value rises. Invest in a variety of stocks and bonds to diversify your liquid and physical assets.
A relevant example here would be theAustralian Retirement Trust’s response to the Russia-Ukraine crisis, seeking to respond to these events but also to capitalise on opportunities that may emerge during times of crisis. Australian Retirement Trust investment portfolios are diversified across different asset classes, regions, countries, industries, individual assets and securities – with minimal direct exposure to investments in Russia. Having eliminated elaborate share and bond exposure in affected countries, the Australian government also increased exposure to world share markets and reduced exposure to bonds after share prices declined and bond prices rose sharply.
#4 Do your research
Making an investment is a big deal, so the decision shouldn’t be taken lightly. Due diligence must be done with a clear notion of what the end goal of the retirement strategy actually is. Given the current circumstances, it’s probably best to invest with a broker that gives higher leverage, providing you with a sense of security while investing.
Make sure you stay on the safe side of any financial turbulence that might come up. Reach out to a Create and Protect Financial Planning advisor.
Wondering what to do first?
Step 1 is evaluating your current investment strategy for retirement. Be clear on what your end goal is, and choose your retirement investment plan based on that. This way you can have an approximation of how it’s expected to perform over the long term - keeping some leeway for unexpected circumstances like the ones we are currently going through. If you have planned to grow your retirement savings to keep up with the rising cost of living, you may have opted for investments that offer good growth potential over long periods—such as shares or property. Alternatively, you may have chosen to structure your strategy to generate a stable income and therefore opted for a more conservative investment approach. In this case, you’re less likely to be experiencing significant volatility. Stay on top of your investment portfolio based on investment strategies that get you the most out of the market!
Make advised investments for life, call a Create and Protect Financial Planning advisor now!
Disclaimer:The information included in all of our blog content is of general nature only. Any general advice included in this information has been prepared without taking into account your objectives, financial situation or needs.
Because of this, you should consider the appropriateness of the general advice to your objectives, financial situation and needs and obtain professional advice before acting on any general advice that we have provided to you.