February stock markets lost ground with the extreme uncertainty of war added to the existing inflation concerns. The major stock indices dropped an average of -3.25% for the month and -7.75% Year-To-Date. Bond averages also dropped last month.
Sanctions that are brutal for Russian leaders also bear a cost for us and western economies. An ethical thought from The Atlantic today: “Paying more for gas is a small sacrifice if it can halt a bloody war or limit the necessity for a military response.” The Federal Reserve meets this week and investors watch how they weigh the added effects of war on inflation. Your investments are positioned for the long term and history illustrates that this bumpy ride, like past geopolitical upheavals, is painful but temporary. Two things to keep in mind now: The Federal Reserve cannot fix secular inflation (that is, gas prices) and inflation is not necessarily bad for equity markets; stocks historically do well in times of high inflation.
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March sun on a new snow cover radiates to fill the house with light. Birdsong greets the dawn again. Seesaw temperatures play havoc from one day to the next. Spring in New England. The price of gas continues to rise. How fortunate we are in our small troubles.
