Current Market Update

In light of recent stock market volatility caused by Russia’s recent invasion of Ukraine, we wanted to review how the stock market has performed over previous geopolitical/military events in world history going back to Pearl Harbor in 1941.

As the table below illustrates, despite higher initial volatility over the one- and three-month periods after such events, the S&P 500 performed well 12 months after all but three of these events.  Additionally, it is worth noting that the three events that produced negative returns after 12 months were accompanied by recessions.

Despite an increasingly challenging investment environment, which now includes a war in Ukraine, economic sanctions on Russia, and higher oil prices, we continue to believe the overall investment backdrop is favorable.  As such, we remain confident in our disciplined investment strategy for both fixed income and equities.

For fixed income, our defensive strategy targets short average duration and maturity, with an emphasis on high-quality bonds.  In a rising interest rate environment, we believe capital preservation is paramount.

For equities, our strategy is to drive long-term performance by selecting stocks with good risk-reward profiles.  We do this by investing in companies we believe are participating in the most compelling secular trends, who have good business models, stable or improving fundamentals, favorable ESG Risk Ratings, and reasonable valuations.