Remember, Crisis Creates Opportunities—Be Ready

• 2 min read

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Carpe diem: Disconcerting Russian invasion further roils markets, but calm investors who don’t panic eventually will seize the day and unexpected opportunities.

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Drawing of a figure standing on pi heads rising in height up to a blowing red flag.

QUESTION:

How worried should I be about Russia’s invasion of Ukraine?

ANSWER:

Very, but it’s not a time to panic. In fact, it’s probably a good time to look for opportunities.

Geopolitics and their impact on investments are extremely difficult to predict. That’s partly why AMG prepares multiple economic scenarios every year for clients to consider. While war in Ukraine was always a possibility, most experts and investors thought Russian President Vladimir Putin was saber rattling, trying to extract concessions from the United States and Europe. Few foresaw a full-scale invasion, followed by massive, coordinated economic sanctions imposed by western democracies, including historically neutral Switzerland.

Going forward, investors need to expect the unexpected, or more accurately, be prepared for the unexpected, including a broadening of the war or even peace breaking out.

How do we invest for the unpredictable? Look for likelihoods, look at valuations and use good judgment to pick the best places to invest—and areas to avoid. Then ask yourself: What if I’m wrong? What if inflation spirals out of control, what if this turns into a recession, and, yes, what if it all works out and boom times return? If your portfolio can handle all those situations, you can sleep at night, even when the market is pinballing.

And the most important thing to remember in a crisis is that a crisis presents opportunities. Market volatility will make your portfolio statement difficult to look at, but it also causes others to panic and sell at lows. Now is no different. As the fog of geopolitical events lifts, be ready to seize the opportunities.

This information is for general information use only. It is not tailored to any specific situation, is not intended to be investment, tax, financial, legal, or other advice and should not be relied on as such. AMG’s opinions are subject to change without notice, and this report may not be updated to reflect changes in opinion. Forecasts, estimates, and certain other information contained herein are based on proprietary research and should not be considered investment advice or a recommendation to buy, sell or hold any particular security, strategy, or investment product.

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