Ask a Trust Officer: Crisis Investing

DEAR TRUST OFFICER:
What portfolio management steps should I take on account of the new war in Europe?
—UNSETTLED INVESTOR

DEAR UNSETTLED:
First, depending upon what you own, an impact will be made on your portfolio by the actions taken by multinational companies, many of whom already have cut their ties with Russia.  So even doing nothing is doing something.

Beyond that, there is no simple advice that will be appropriate for all investors.  What you should do depends upon what you have, what your objectives are for your portfolio, and what your time horizon is.

Jason Zweig, writing in The Wall Street Journal as the Russian invasion of Ukraine was just beginning, made points worth considering [“How to Invest With Calmly in a Chaotic World,” February 25, 2022]:

“One is that it’s a bad idea to overhaul your portfolio when you’re afraid. The time to become more conservative is when things are going well, not when the world seems to be coming apart. . . . To put it bluntly, when things go bad, just about every market turns red at once, as they did for much of this week.”

Another “risk, though, is that scenarios that seem likely often don’t materialize—and, even if they do, they can become too popular, eliminating the bargain prices that produce superior returns over time.”

Do you have a question concerning wealth management or trusts?  Please send your inquiry to contact us.