The impact of Russia/Ukraine crisis on your investment portfolio

Serfaas Badenhorst, Portfolio Manager at Momentum Securities unpacks the impact Russia’s invasion of Ukraine may have on your investment portfolio

The world is almost three weeks into a Russian invasion of Ukraine, which proceeded to bring about volatility and weakness in an already fragile stock market. Given the potential immensity of this crisis, it is important to maybe take a quick step back and evaluate your financial plan.

Recently, the world has focused on how inflation is bad for the stock market, and now a big question has arisen surrounding the Russia/Ukraine crisis, which has now become an energy crisis because Russia is the world’s third-largest producer of oil and gas.

What this does is bring about extra inflation which is extra bad for the stock market and most portfolio returns. One thing that needs to be recurring in your portfolio is quality. As long as you have quality stocks in your portfolio you have nothing to fear about.

By quality stocks, I am referring to stocks like Google and Amazon. Stocks with a strong balance sheet and products we use daily.

However, if you have commodity exposure, you should hold on to it. The commodity is obviously seeing a big spike in price and that's basically because of fears on the supplier's side. This is especially important if you want to add additional commodity exposure.

In case you have industrial stock exposure, now is not the time to be afraid of gradually adding to these positions. There is likely to be long-term value in these stocks when the crisis simmers down.

For every crisis, there are good responses and bad responses for every investor. In a volatile market like this, the best results are yielded by those who endeavour to stay calm, stay invested, and do so with quality stocks.