Russia-Ukraine Crisis Shakes Markets, but Long-Term Outlook Is Better

Even so, long-term investors with well-diversified portfolios of stocks and high-quality bonds — whether held directly or through low-cost mutual funds and exchange-traded funds — will probably be able to ride out this crisis, as they have so many others.

While stocks often fall amid global turmoil, U.S. Treasury bonds tend to rally as investors seek havens and drive up their prices. Bond prices and yields move in opposite directions, and because interest rates are rising, Treasuries have declined in value this year. But in a major stock downturn, they usually provide a short-term buffer for portfolios that contain them.

Riding out a storm in the stock market has been a good strategy over the long term. One year after the 1941 bombing of Pearl Harbor, the S&P 500 gained 15 percent. A year after the U.S. invasion of Iraq in 2003, it was up 35 percent. History shows that just one year after most stock-market-shattering crises, the S&P 500 stock index has risen.

The Russian hostilities in Ukraine could be the start of something much bigger: a geopolitical shift that plunges the world into a 21st-century version of the Cold War. But even if that’s the case, the hard numbers suggest that the financial implications for prudent, diversified investors who live far from immediate danger zones may not be all that severe.

The Cold War was destructive and debilitating for vast populations, but it was an excellent period for stock investors. Even during recessions and regional wars, the Dow Jones industrial average turned in an outstanding performance.

Here are the numbers, which I calculated over the long Presidents’ Day weekend:

From President Truman’s March 17, 1948, speech to Congress criticizing what he called the Soviet Union’s expansion of Communism in Eastern Europe, until the end of December, 1991, when the Soviet Union ceased to exist, the Dow returned 10.05 percent, annualized. In the roughly 30 years since then, through Friday, the Dow returned 10.77 percent, annualized, a bit better than during the Cold War, but not by much.

AquaFeel Solutions Tristate Announces New Office in North Jersey, Committed to Ensuring Clean Water for All

North Jersey – AquaFeel Solutions Tristate, a company dedicated to providing high-quality water purification solutions, is excited to announce the opening of their new office in North Jersey. Formed by three passionate individuals, Alexander Henriquez, Gustavo Jimenez, and Juvenia Silvester, AquaFeel Solutions Tristate is set to make a significant impact on the health and well-being […]

Know More

Trevaun Solomon’s Net Worth Soars Past $900,000 USD After Project Jaguar Group Acquires Academic Institutions and Grows Its Online Private School Across the Caribbean and Latin America

Trevaun Solomon, a dynamic force in the world of educational technology, has seen his net worth soar past $900,000 USD following a series of strategic acquisitions and the expansion of Project Jaguar’s online private school across the Caribbean and Latin America. This remarkable financial milestone highlights Solomon’s success and the growing influence of Project Jaguar […]

Know More

Unleashing the Future of Forex Trading: The Thrive FX Capital Revolution

Empowering Traders with AI-Driven Forex Account Management In a groundbreaking and transformative approach to forex trading, Thrive FX Capital stands as the vanguard of innovation with its AI-driven forex account management tool and service. Founded by the multiple award-winning entrepreneur, Sydney Kibuuka, Thrive FX Capital embodies a vision that redefines the very essence of success […]

Know More