It details the reasons for the market drop:
Russia’s invasion of Ukraine is already affecting global markets — here’s what it could mean
Hi stupidbird
A lot has happened in the past 24 hours: Late yesterday, Russia began a full-scale invasion of Ukraine, with airstrikes reported in Ukraine’s capital and dozens of other cities. Western leaders have condemned the attack and vowed to respond decisively.
With all of the conflict’s uncertainty, we’re breaking down what’s happening and how it might affect you as an investor.
Why is the conflict impacting markets?
Stocks have been falling all year as investors worry about the impact of high inflation and upcoming interest rate hikes. This conflict is weighing on what’s already hurting markets:
Uncertainty: While some uncertainty is always a given, high geopolitical turmoil can be bad for stock markets. Some investors have been retreating to "safe-haven assets" like US government bonds, gold, and even "defensive stocks,” which tend to be less affected by volatility (think: healthcare and utilities).
Inflation: Global sanctions on Russia could cause prices of oil, food, and other commodities to soar even more. Russia supplies more than a third of the EU’s natural gas and is the world’s largest wheat exporter.
FYI: The vast majority of Western companies don't have operations in Russia or Ukraine. But large multinationals that do — from oil giants to carmakers — are bracing for further sanctions that could disrupt their supply chains and operations.
How are markets reacting?
As the crisis intensifies, stocks have dropped while investors have moved out of more volatile assets and into “safe haven” investments:
Stocks fell globally Thursday morning but some markets have been more affected than others. Germany’s market is down more than the US’s, since Germany has more economic ties with Russia (Russia supplies a third of Germany’s oil). Russian stocks are also slumping.
US Treasury bonds are spiking. As demand for US government debt rises, interest rates on those “safe haven” bonds are dropping. While the US dollar is appreciating, the Russian ruble is losing value.
Commodities like oil, gold, and wheat are soaring. Crude oil is at a seven-year high as the world worries about reduced supply from Russia, while gold prices are rising as investors seek more stability.
How could this play out long term?
No one can predict the future, but historically the US market, as represented by the S&P 500 index, has bounced back from these types of conflicts over time. Since 1941, the total fall in the stock market after major geopolitical events was 5% on average — before it eventually recovered after a few months*. Of course, what happened in the past isn’t a guarantee of what could happen in the future.
What could be the takeaway for investors like me?
A couple important things to keep in mind:
Diversification: Spreading a portfolio across different industries and investment types (think: stocks, bond, cash, real estate) can help hedge risk when certain assets decline. However, it’s important to remember that diversification isn’t guaranteed to prevent loss, especially when markets decline as a whole.
Time: Long-term investors have more time to potentially recover from market downturns and global conflicts. While certain individual stocks might not recover, the US stock market has historically been resilient over time.
While we can provide support as an informational markets resource, the markets are just one aspect of a crisis that has significant implications for human life and global stability.
For regular breakdowns on financial and market news, you can check out our Snacks newsletter.
Sincerely,
The Robinhood Team
What I find amusing about this is all those millennial Biden-voting investors are probably shitting their pants over the market drop, as they've never had to do anything under the wings of a weak leader. To make it even more funny (for me, because I'm an ass even though I don't want to see this) is there's a very real, albeit small, chance that a draft could be instated if Russia drags the world into another war.
Our contribution this time around is going to be meaningless except for the salty tears cried by the children that might finally understand something more than muh pronouns.
It details the reasons for the market drop:
>Russia’s invasion of Ukraine is already affecting global markets — here’s what it could mean
>Hi stupidbird
A lot has happened in the past 24 hours: Late yesterday, Russia began a full-scale invasion of Ukraine, with airstrikes reported in Ukraine’s capital and dozens of other cities. Western leaders have condemned the attack and vowed to respond decisively.
With all of the conflict’s uncertainty, we’re breaking down what’s happening and how it might affect you as an investor.
Why is the conflict impacting markets?
Stocks have been falling all year as investors worry about the impact of high inflation and upcoming interest rate hikes. This conflict is weighing on what’s already hurting markets:
Uncertainty: While some uncertainty is always a given, high geopolitical turmoil can be bad for stock markets. Some investors have been retreating to "safe-haven assets" like US government bonds, gold, and even "defensive stocks,” which tend to be less affected by volatility (think: healthcare and utilities).
Inflation: Global sanctions on Russia could cause prices of oil, food, and other commodities to soar even more. Russia supplies more than a third of the EU’s natural gas and is the world’s largest wheat exporter.
FYI: The vast majority of Western companies don't have operations in Russia or Ukraine. But large multinationals that do — from oil giants to carmakers — are bracing for further sanctions that could disrupt their supply chains and operations.
How are markets reacting?
As the crisis intensifies, stocks have dropped while investors have moved out of more volatile assets and into “safe haven” investments:
Stocks fell globally Thursday morning but some markets have been more affected than others. Germany’s market is down more than the US’s, since Germany has more economic ties with Russia (Russia supplies a third of Germany’s oil). Russian stocks are also slumping.
US Treasury bonds are spiking. As demand for US government debt rises, interest rates on those “safe haven” bonds are dropping. While the US dollar is appreciating, the Russian ruble is losing value.
Commodities like oil, gold, and wheat are soaring. Crude oil is at a seven-year high as the world worries about reduced supply from Russia, while gold prices are rising as investors seek more stability.
How could this play out long term?
No one can predict the future, but historically the US market, as represented by the S&P 500 index, has bounced back from these types of conflicts over time. Since 1941, the total fall in the stock market after major geopolitical events was 5% on average — before it eventually recovered after a few months*. Of course, what happened in the past isn’t a guarantee of what could happen in the future.
What could be the takeaway for investors like me?
A couple important things to keep in mind:
Diversification: Spreading a portfolio across different industries and investment types (think: stocks, bond, cash, real estate) can help hedge risk when certain assets decline. However, it’s important to remember that diversification isn’t guaranteed to prevent loss, especially when markets decline as a whole.
Time: Long-term investors have more time to potentially recover from market downturns and global conflicts. While certain individual stocks might not recover, the US stock market has historically been resilient over time.
While we can provide support as an informational markets resource, the markets are just one aspect of a crisis that has significant implications for human life and global stability.
For regular breakdowns on financial and market news, you can check out our Snacks newsletter.
Sincerely,
The Robinhood Team
What I find amusing about this is all those millennial Biden-voting investors are probably shitting their pants over the market drop, as they've never had to do anything under the wings of a weak leader. To make it even more funny (for me, because I'm an ass even though I don't want to see this) is there's a very real, albeit small, chance that a draft could be instated if Russia drags the world into another war.
Our contribution this time around is going to be meaningless except for the salty tears cried by the children that might finally understand something more than muh pronouns.
(post is archived)