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Market Update – Recent Conflicts- Geopolitical Tensions

Updated: Jul 20

Jayson Moss, CFA

Chief Investment Officer


Market UpdateRecent Conflicts


Geopolitical tensions increased considerably with the unprovoked invasion of Ukraine by Russia on February 24th. The globalized economy the world has known for the past four plus decades has been placed into question recently as supply chain disruptions resulting from the advent of COVID-19 have been exacerbated by the Russia-Ukraine conflict and resulting sanctions. As such, NATO and allied countries have been increasingly looking inward for solutions. The importance of food security, energy independency, insourcing productive capacity and defensive capabilities has never been greater. While the outcome of the Russia-Ukraine conflict is uncertain and highly unpredictable, it will undoubtedly have ramifications on the complexion of the global economy and the hierarchy of the global power players.


Given the fluidity of the conflict, attempting to tactically determine outcomes probabilisticly is a mug’s game. With that said, it is not unreasonable to expect continued inflationary pressure on goods and services, the potential for slower economic growth and possible tighter monetary and fiscal policy going forward, baring an all-out world war. Given our long-term approach to investing, we remain favorable on the U.S. economy and the position of the U.S. with its partners to drive economic growth over time. With this favorable long-term outlook in mind, we remain positive on equities compared to fixed income given the potential for a higher interest rate environment. However, we are cognizant of the elevated near-term risk profile of the global economy and the potential for slower growth from inherently higher risk economies given the backdrop of the rapidly evolving conflict in Ukraine. As such, we believe developed markets offer a more attractive risk-return profile over the near, medium and long term.


Considering the aforementioned factors, Evolve has reduced its exposure to emerging markets while increasing its holdings in domestic and developed markets, notably Canadian equities. In the same light, Evolve has rebalanced its alternative asset exposure to appropriately reflect the potential for continued inflationary pressures and heightened risks to global growth. Consequently, Evolve has reduced exposure to developing market real estate given it carries inherently higher risk and foreign currency exposure.

As always, if you should have any questions, please do hesitate to contact Evolve Wealth Advisors.


Jayson Moss, CFA

Chief Investment Officer


To learn more about Evolve Wealth Advisors, please visit our website at www.evolvewealthadvisors.com. Should you have any questions regarding your account or how Evolve Wealth Advisors can help with your future Estate or Retirement planning needs, please contact Peter Henry, CEO at 818-970-6940 or Patrick Kinney, COO at 503-490-0273.




Disclosures:

The market commentary appearing above has been prepared by personnel of and for Evolve Wealth Advisors, LP. The information contained within the commentary is provided as general market commentary only and does not constitute any form of regulated financial advice, legal, tax, or other regulated financial service. It is not considered to be investment research or a research recommendation, as it does not constitute substantive research or analysis. Any charts or graphs do not reflect past or current recommendations by Evolve Wealth Advisors and should be considered an academic treatment of empirical data. Investors should consult their financial advisor when applying the assumptions of any chart or graph.

Evolve Wealth Advisors’ commentary is not directed to, or intended for distribution to or use by, any person or entity who is a resident or citizen of or located in any municipality, county, state, country or other jurisdiction where such distribution, publication, availability, or use would be contrary to any law or regulation, or which would subject Evolve Wealth Advisors to any registration or licensing requirement within such jurisdiction.

The foregoing market commentary does not purport to contain all the information that an interested party may desire or require to make an investment decision, and the information provided is not intended as a sufficient basis on which to make an investment decision. It is intended only to provide the observations and views of the author and for educational purposes only and should not be used to predict security prices or market levels. While it has been derived from sources believed to be reliable, Evolve Wealth Advisors does not represent or warrant its accuracy or completeness. It is not intended as a solicitation for a particular investment, and it may be changed at any time, without notice, by Evolve Wealth Advisors and its personnel. Evolve Wealth Advisors accepts no liability for losses arising from the use of its market commentary. Investors should seek investment, financial, and other advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that past performance does not guarantee future performance. No investment is guaranteed, and all carry some element of risk of loss, partial or complete.


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