Please watch this video to receive an update on the stock market since Russia invaded Ukraine. Please click on the expand button in the lower right-hand corner of the video (just to the left of the word “Vimeo” to watch it with full screen).
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Hello, I’m Bob Wink and this is my son Ken Wink from Summit Financial Consulting, LLC. We apologize that Jim couldn’t be here for this video but he’s working at home right now with a bug. We figured with everything going on in the world, you’d appreciate an update and hear what we’re thinking.
As I’m sure you’ve heard, Russia attacked Ukraine last night.
Russia destroyed 74 military targets, including 11 airfields in Ukraine.
Russia’s foreign minister has said that their intent was to demilitarize Ukraine. They seem to have accomplished that goal with this attack. Russia has said their goal is to keep civilian casualties to a minimum. They supposedly advised Russian soldiers to be courteous to Ukrainian soldiers upon confrontation. Time will tell if that’s happening.
Russia has been saying for a long time that they were opposed to Ukraine joining NATO. NATO is a group of 30 member countries that agree to help protect each other. When you look at the map, it’s pretty much a “Let’s keep an eye on Russia” club.
If Ukraine were to join NATO, that would give Western countries the ability to spy on Russia at unprecedented levels.
From the United States view, it would be like Mexico or Canada joining up with Russia or China…that would be bad for us, so this goes to show why Putin is so opposed to Ukraine joining NATO.
Russia views this attack and the sanctions as the lessor of two evils for the long run. What we don’t know right now is if Putin will stop at this point, or completely absorb Ukraine. One possible outcome is that this is the extent of the military moves and that Russia threatens to completely dissolve the Ukrainian government unless they stop their NATO application. It’s also possible they use their influence to get a more anti-NATO politician leading Ukraine. We’ll keep an eye on things regardless of the outcome.
When it comes to the stock markets, they have been anticipating this move for almost a month. The S&P 500 was down almost 10% before today. Although the immediate reaction this morning was shock, the past few hours the market has actually been recovering. There’s an old saying on Wall Street: Sell the rumor and buy the news. There is a chance that is what is happening currently. At the time of this writing, tech stocks are actually positive for the day, and gold prices as well as oil prices have dropped from their panic highs.
In 2022, we’ve owned a good portion of Gold. From the lows, Gold is now up over 9%, and that has helped our actively managed portfolios immensely. At this time, we are not panicking. Our greatest fear at this point is that we panic and sell low, and then the market recovers and we miss out on big gains.
If the market starts to deteriorate again, we may sell stocks. We may sell all stocks and move to a money market, or even bet against the stock market. At this time, those moves are not prudent. All of the emotions inside of the average investor say that you should sell low. We are here to tell you that at this point, we don’t believe it’s necessary to panic. Our hope is that the bottom is in for investors, but if anything changes, we’ll update our stance.
When your portfolio loses money, we get a pay cut, so we have an incentive to keep an eye on it. That’s exactly what we’re going to do, today and every day. If further moves are necessary, after consulting our research, we’ll make the moves immediately.
If you have any further questions, please feel free to give us a call or an email. We appreciate you, and encourage you to remember: This too shall pass.
Have a great week, and we’ll keep you updated! God bless you and your family! Thank you!
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If you have any questions about taxes, your individual investment portfolio, our 401(k) recommendation service, or anything else in general, please give our office a call at (586) 226-2100. Please feel free to forward this commentary to a friend, family member, or co-worker. If you have had any changes to your income, job, family, health insurance, risk tolerance, or your overall financial situation, please give us a call so we can discuss it.
Thank you for your confidence and referrals!
Bob Wink, Ken Wink, Jim Wink, Zach Bachner and James Baldwin
Robert L. Wink, Jr. • Kenneth R. Wink • James D. Wink • Zachary A. Bachner, CFP® • James C. Baldwin
43409 Schoenherr Rd., Sterling Heights, MI 48313
www.summitfc.net • (586) 226-2100 • Fax: (586) 226-3584
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This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. Investment advisory services are offered through Summit Financial Consulting, LLC, an SEC registered investment advisor. Registration does not imply a certain level of skill or training. Summit Financial Consulting Investment Advisor Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Note: Please update Summit Financial Consulting, LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an additional copy. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. The Sherman Group, LLC is not associated with Summit Financial Consulting, LLC in any way, other than a research sharing partnership. Back testing is more heavily scrutinized than any other type of investment analysis because it can be updated to take advantage of past data. The algorithms and trading signals that we receive from the Sherman Group, LLC were created using back testing with the goal of creating a sustainable research process. We have reviewed data from the entire 20 year period which was mostly back tested, and have also personally reviewed the live data for the past 5 years and feel comfortable with it, but we encourage you to meet with us and ask questions so you are fully informed on what we plan to do with your investment assets at TD Ameritrade. It is important to look at fees, taxable repercussions, and trading frequency when looking at a rate of return number. There is no perfect system or research feed, and Sherman Group, LLC has had both longer term and short-term periods where they lost money. Investing involves risk, and these portfolios are no exception.
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The returns are calculated using a true daily time-weighted rate of return (“TWRR” as a primary performance return methodology). TWRR is the CFA Institutes Global Investment Performance Standards (“GIPS”) required calculation for managed accounts. TWRR provides a measure of how an account was managed regardless of the dollar value and is unaffected by external cash flows. TWRR is required in GIPS Guidelines for managed accounts for two primary reasons:
- Impact of external flows on TWRR: Since an advisor typically does not control the timing or magnitude of investor cash flows, TWRR is deemed appropriate as it isolates performance regardless of the portfolio/account’s dollar value and external flows.
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