Does a Geopolitical Crisis Equal a Market Crisis? Not Necessarily.April 11 2022
Help your clients understand it is normal to feel concern and uncertainty during a global crisis, but a patient investor who absorbs short-term volatility may benefit over the long term.
To better understand the potential impact of the Russia-Ukraine conflict on markets, let’s look at other recent crises. While any toll on human lives is devastating, it is helpful to note that financial markets have not only recovered from past crises, but, in many cases, emerged stronger.
MARKETS HAVE EVENTUALLY RECOVERED FROM PAST CRISES
S&P 500 Index January 1, 2000, Through March 21, 2022
Past performance is no guarantee of future results. It is not possible to invest directly in an index. Chart is for illustrative purposes only.
Sources: T. Rowe Price, S&P, and https://www.matteoiacoviello.com/gpr.htm. Data downloaded from https://www.matteoiacoviello.com/gpr.htm on March 21, 2022. See Additional Disclosures below for more information about S&P data.
Don’t let fear derail your long-term plans.
It is normal to feel concern and uncertainty during a global crisis. Short-term market downturns can be disconcerting, and they may heighten anxiety among investors. If the stock market’s historical trends hold true, however, a patient investor who absorbs short-term volatility may benefit over the long term.
HOW MARKETS HAVE BOUNCED BACK AFTER CRISES
S&P 500 Index performance during and after past crises.
Past performance is no guarantee of future results. It is not possible to invest directly in an index. Table is for illustrative purposes only. See Additional Disclosures below.
Sources: T. Rowe Price and S&P. One-day return for 9/11 attacks after reopening of market on 9/17/01.
For additional resources to help your clients understand the role of fixed income, keep a long-term perspective, and chart a steady course, visit Speaking of Markets.
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