AnonymousSource: Arlington Financial Advisors
The stock market is behaving wildly as a war between Russia and Ukraine grows more likely. But local financial advisor Arthur G. Swalley cautions investors to remain disciplined and not panic sell.
This week Russian President Vladimir Putin officially recognized two breakaway republics in Eastern Ukraine and pledged to support their territorial claims. President Biden denounced this as the start of an invasion by Russia, and the U.S. and Europe announced sanctions. The crisis has shaken stock markets already nervous about inflation and the likely prospect of interest rate hikes by the Federal Reserve.
Swalley, a founding partner and director of investments at Arlington Financial Advisors, an independent financial advisory firm in Santa Barbara, says long-term investors should stay calm. Given the rapid rise in fossil fuel and precious metal prices, and quick market reactions to each new detail of the unfolding crisis, it appears much of the recent market volatility has been forecasting the war and is not a permanent reaction to it, he said.
Arthur Swalley
“At Arlington, we see this pre-event volatility as a common market response to uncertainty. Typically, as events actually unfold, uncertainty is answered and markets stabilize,” Swalley said. “A disciplined investment approach is critical at times like these to avoid overreaction and panic selling at the wrong time, when short term stock prices are generally down and “safe” assets like cash and precious metals feel better.”
It can be hard to remain calm when oil is moving towards $100 a barrel and Santa Barbara drivers are feeling it at the pump. The last time prices climbed this high was in 2014 and 2015, not coincidentally when Putin annexed Crimea in his first move against the Ukraine. Russia is a massive energy exporter and benefits from higher energy prices. However, while the Ukraine does play a role, there are other factors pushing energy prices up, particularly post-vaccine consumer demand, Swalley said.
“We are driving more, going out to eat more, and traveling more as COVID-19 restrictions have eased and pent-up demand has been unleashed,” he said. “During the pandemic, many energy producers slashed output by shutting facilities. Reopening takes a lot longer than shutting down, so the lower supplies combined with higher demand has pressed energy prices higher.”
Consumer demand is also driving overall inflation, pushing businesses to pay more for basics like labor, materials and food. The Federal Reserve has said it wil respond by raising interest rates several times this year. Over the past 40 years, higher interest rates have successfully kept inflation in check. Interest rates are currently at historic lows.
Swalley said his firm believes uncertainty over the impact of interest rate hikes and inflation is a much bigger economic and market risk factor than the Ukraine crisis. The good news is, when the Federal Reserve has begun raising interest rates in the past there has never been a recession or bear market at the same time.
Another concern for the markets is the possible emergence of new, more dangerous COVID-19 variants. New outbreaks could put the brakes on the economy’s post-pandemic surge. However, Swalley and his team also see this as a moderate concern. While the risk cannot be completely eliminated, effective vaccines will hopefully be able to keep the effects of the disease muted and manageable, he said.
Overall, investors shouldn’t panic. Have a sensible, balanced, long-term investment strategy and stick to it, Swalley said.
“Each investor should have a disciplined plan which helps them avoid rash decision making,” he said. “Ideally, a good plan can help investors take advantage of the rash decisions of others.”
Arlington Financial Advisors is located at 100 E. De La Guerra St, in Santa Barbara. For information call 805-699-7300, contact info@arlingtonfa.com, or visit https://www.arlingtonfinancialadvisors.com/.
Elections have consequences.
UNRULY – the sure do! Good thing we have someone in the White House who will treat Putin like the criminal he is!
SAC – I watched today and learned how the idiot in the White House will treat Putin. Putin invades a foreign country and Biden will now wait 30-days to see how his sanctions against Putin work. Although you may not openly agree with my next comment, I have no doubt you know what I write is fact: If Trump were leading the US, Putin would never have invaded Ukraine. Putin would think about it but never do it.
If Trump was still president, his unpredictability might have dissuaded Putin from making his move (as he did by taking Crimea from Ukraine when Obama/Biden were in the White House). Bullies recognize weakness and take action when they expect a tepid response. And sanctions will take months, sometimes years, to have meaningful impact on the target regime.
2:33 – How would he have “dissuaded” Putin? You say sanctions are pointless, so how would Trump “act tough?”
I wrote this to a friend yesterday:
Hurting Putin and his cronies, the oligarchs, IN THE WALLET, actually IS the only way to have an effect on the war, to prosecute this war.
Dead citizens play NO role. It’s all about the money. And the sanctions I’ve read in depth about? Gonna hurt, gonna affect the money the rich make. Sanctions will make things happen. Dead soldiers and citizens, war refugees, all the suffering, any and every where, doesn’t matter at all, makes zero difference.
Better that we withhold weapons from Ukraine until they do us a favor? Better that we praise Putin for his despotic actions?
Wait!
Why is this national news on edhat? Is it a commercial for Arlington Advisers? Guess so. Hey, I’m happy with mine at JP Morgan Chase.
“don’t look up!”
@412pm – Or.. its someone trying to give out free advice in a scary time.
DOULIE – lol, no. Putin probably wouldn’t invade if Trump were still (throwing up in my mouth) President, because he wouldn’t need to. Trump would hand Ukraine over to his buddy without him asking twice. No, Putin would not need to do anything, were Trump still here to do his bidding for him. Good thing we have a real American in the White House now!
Please understand their is a difference between recognizing the skill and competency of your advisory and praising him. I don’t know how you can look at what Putin did; openly build up troops for months, telegraphing his intentions for the world to see, with no consequences only empty threats, and now roll right into another country with troops, tanks and warplanes with what amounts to a slap on the wrist in response. He knew Europe was dependent on Russia for gas/oil and wouldn’t mess with their own energy supply, he played the West like a fiddle and won. Just like he did with Crimea.
This is a shill. If it were just for pro bono publico the piece would not contain the contact information for the brokerage. They could easily have paid edhat to advertise and edjat should ask them to do so.
Oh, and the Fed created at least 40% of all Dollars circulating, in the last year or so. That is a LOT of under reported inflation!!! Stock Market and real estate are most Bubble-acious on top of that! Add War to these and no wonder the brokers are clamouring to reassure and gain clients.
Biden’s response to the situation in Ukraine is indefensible. Truly and completely. Putin amassed an invasion force of 200k. And when we shared intelligence that Russia was going to invade, we slow played sanctions. This is a betrayal and abandonment of Ukraine.
This presidency, like the last, has been a dumpster fire.
Sac – Trump was horrible, but in this case his unpredictability might have helped. It might have also led to the end of the world with a full on nuclear war…but it might have helped as Biden’s been predictable and weak. He’s essentially abandoning Ukraine…seriously, how are you celebrating Biden at this point? What more of a train wreck could this be?
VOICE of PUTIN and others – tell me, exactly, what you think Trump would have done differently in this situation? You keep praising what he “would have” done, so now tell us what that is. Dollars to donuts, we’ll get no response from you.
Not approve NordStream2. Not having shown weakness / military incompetence pulling out of Afghanistan. And simply not being part of the same administration that allowed Russia to do the exact same thing during Obama’s term. for starters….
I cant speak for VOR but I think he would have thrown all sanctions at Russia (not to mention scared the hell out of all our generals as he probably rambled and raved about the size and beauty of our nuclear weapons). Seriously though, how are you defending Biden? By all accounts he has slow played the sanctions and gone out of his way to not be “too strong”.
Duke and Voice, do you still really believe that after Trump refused to give Ukraine funds because he didn’t get the intel he wanted and as of this week he’s been saying Putin is “savvy” and a “genius.” My guess (because we’re all speculating here and none of us really know what that madman would have done or at least attempted to do before Generals intervened) is Trump wouldn’t have done a thing. He would have said its not our problem, that’s a weak country and if Putin is able to easily take it then he deserves it… because he’s such a genius.
You are aware you adversary can be “savvy” and a “genius”, while still being an adversary? Putin’s taken over two countries and suffered little to no repercussions. I certainly disagree with what he’s doing, but he is very good at doing what he is doing.
CHEVY – exactly. I love how Duke and VOUSSR fawn over Trump as if he would “act tough” against his best friend. What in Trump’s history leads you to believe he would act tougher than Biden against Russia? There’s no evidence suggesting he would lift a finger against Putin. None, at all.
Now, me defending Biden? Nope, never said I was. I’m just curious how you all can still clutch at your love of Trump in the face of Russian aggression.
VOICE – Putin was in no way, by any definition of the word, Trump’s “adversary” at any time in history. Mind-freaking-blowing that you could even suggest that he was.
VOICE – Nord Stream wasn’t for Biden to approve or not. He simply waived sanctions in an effort to rebuild ties with our ally, Germany, after Trump ruined the relationship. What you clearly don’t understand about diplomacy and foreign relations is that sometimes you need to compromise for a greater, and often future, goal. Nice try though.
Biden Says Russia’s Putin Is A ‘Worthy Adversary’
https://www.npr.org/2021/06/14/1006282205/biden-says-russias-putin-is-a-worthy-adversary-whether-or-not-he-trusts-him
Show us that you listen to AM talk radio and watch Fox News without telling us you listen to AM talk radio and watch Fox News…
SBO – Who? How is anyone defending Biden’s response at this point? There literally should be complete bipartisan support for throwing everything at Russia to stop this aggression. This is not a political issue…don’t make it one. If Trump was in office you would be screaming that Trump is giving Ukraine away to his strongman friend Putin. It’s time to scream that at Biden.
SacJon: The ex-gameshow host would have sat down to a dinner of hamberders and used the best words, greatest words, a lot of people are even saying they’re fantastic. Words like you’ve never heard before. Then when they go home he could write bigly love letters to Putin and Kim, maybe even diverting Jared from his Israel/Palestine peace, federal prison reform, and Atlantis discovery missions to take a few pictures and look serious while glad-handing. All in a day’s work for the scam artist family.
How am I bullying? What are you even talking about?
Sonny – OK…but how does that excuse or explain Biden’s tepid response?
Everyone on here still pumped about all the fossil fuel restrictions and limitations And shutdowns over the last decade?
It’s going to be okay Duke. President Biden’s son, Mitt Rommey’s son, Nancy Pelosi’s son, and John Kerry’s son are on the board of directors for energy companies in Ukraine or doing business with Ukraine. I’m sure they’ll get things sorted out with our best interests in mind. Luckily nepotism was only a concern during the last administration.