March 5, 2014
With the Ukraine crisis escalating, markets turned sharply negative on Monday. Investors fled from stocks and other assets into safer investments like Treasuries and metals. As we continue to watch how this progresses, analysts and world leaders are considering how this political unrest could potentially affect the global economy.
Russian troops have moved into the province of Crimea, located on the Black Sea. The Black Sea area is one of the world's most prominent grain production and export locations. Last year, that region accounted for almost a quarter of the global wheat exports, and, as a result, producers are beginning to safeguard their stock in the event the Ukrainian currency suffers a major collapse. How this turmoil may result in some kind of interruption to grain supplies has yet to be seen, since it is still in its early days.
Warren Buffet provided a steady antidote to the market reaction, "If we get into a major war, the value of money goes down, so the last thing you'd want to do is hold money. The stock market is going to advance over time. You are going to be a lot better off holding productive assets over the next 50 years." Before you leap into a different investment strategy, make sure you're doing it for the right reasons. We all wish that it was a straight line to the top; unfortunately, we have to endure some bumps along the way.
Ethan Wade, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).