Financial markets have been volatile this week after Russia invaded Ukraine. Some investors are wondering what this means for their portfolios.
As many as 190,000 troops were assembled by Russia in the largest military operation in the region since World War II.
On Thursday, Putin authorized a full-scale attack. Many hundreds of miles from the previous conflict zone, the cities of Ukraine were bombarded by explosions in the hours that followed. Dozens of casualties were reported by Ukrainian officials.
Oil hit $100 a barrel for the first time in more than a year on the back of concern about the impact on global supply should major crude producer Russia be unable to move exports.
Morgan Stanley Wealth Management's chief investment officer Lisa Shalett believes that markets won't return to business as usual after the initial shock of the situation in Ukraine.
I think it is a big deal. She told Insider that it was a risk off factor in the next few weeks.
She said Morgan Stanley is cautious.
When there are crises around the world, whether it is a war, a trade war, or a political scandal, these things tend to make.
Since Putin said early on Thursday that he had authorized military action, investors have dumped riskier assets such as stocks and coins and gone for the safety of gold, government bonds and the dollar.
She said that this is the typical way that investors get deployed in this environment, selling high growth stocks and buying defensive assets, like gold and bonds. A good long-term strategy is responding to a rapidly-changing set of catalysts.
She said that the situation in Russia-Ukraine is very fluid and fast moving. That is not something that you can base a portfolio asset allocation or portfolio construction decision on.
Anything short of a full-blown war is likely to be short-lived in the context of long-term investing, which is what our clients tend to do.
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