It may seem callous to talk about the stock market on such a dark day for Europe and the people of Ukraine. But the reality is that share prices are falling today. Many investors will be worried and may be wondering if they need to take action to protect their life savings.
Everyone’s circumstances are different, of course. I can’t offer advice, but what I will do in this article is to explain exactly what I’m doing with my own portfolio today. I’ll also discuss my plans for the days and weeks ahead.
First steps
What I’m doing today — apart from absorbing the news — is nothing at all. I think it’s fairly safe to assume that for most people, in most parts of the world, the invasion of Ukraine won’t have a direct impact. Similarly, most businesses will also continue to operate as usual.
The reality is that even within my lifetime, wars, financial crises, and the Covid-19 pandemic have caused disruption for the world economy. But in most cases, things have continued to progress. I expect that to remain true.
FTSE 100 group Unilever will continue to sell branded consumer goods in all over the world. Here in the UK, Tesco will remain our largest supermarket. Lloyds will still be the UK’s largest mortgage lender.
Similarly, I don’t see much to affect the operations of successful British stocks such as Greggs, Games Workshop and Howden Joinery.
What I’ll do next
My portfolio only contains one company (out of 25) that I think could be badly affected by the situation in Ukraine. I’m not going to do anything with this stock today, but I will spend some time thinking about it over the weekend.
Looking ahead to the coming days and weeks, I plan to be a buyer of shares, rather than a seller. I already have a little cash in my portfolio that I’ve been sitting on while hoping prices would ‘improve’ (that is, fall). Now that’s starting to happen, I may bring forwards my next buy.
I may also try to free up some more cash by selling the shares I hold in a company that recently received a takeover bid. I was planning to keep these until the deal completed. If I sell today, I’ll lose around 2% of the takeover price, but I’ll have a useful lump of cash to put into some new long-term buys.
Today’s share price falls: words from Warren Buffett
Legendary US investor Warren Buffett once said that investors should “never bet against America”. Despite some “severe interruptions”, said Buffett, the US had delivered “breathtaking” progress over more than 200 years.
I think Mr Buffett’s comments are a useful reminder that the stock market is a place for long-term investment.
Over the coming months, some of my companies may face fresh problems as a result of events in Russia and Ukraine. But I’m confident that over the years ahead, they will continue to make progress.
I’ll be staying invested during this uncertain time. For me, it’s the only approach that makes sense.
