Hello. I’m Tim Buckley, Vanguard’s CEO.
As you know, recent events have added a new dimension of risk to the markets.
Beyond the very real human cost, the invasion of Ukraine by Russian forces has resulted in increased market volatility and significant sanctions. Further economic costs in the form of rising energy prices and additional supply chain risks are likely to follow.
We all know that risk and volatility are part of investing, but they can test your clients. They’ll be tempted to move to the sidelines until the uncertainty passes.
Whether the markets have reacted to geopolitical risk, fears of inflation or even a pandemic, time has shown that the best strategy is to stay diversified and invested. In 30 years, I have yet to meet the investor who can successfully decide both when to exit the market and when to get back in. As you well know, rebounds can come as quickly and unexpectedly as the selloffs they follow.
Urge your clients to maintain their perspective and focus on the long term. They will come out closer to the goals you set together. If those goals haven’t changed, their investment approaches shouldn’t either – even in times like these.
The history of geopolitical risks demonstrates that markets are resilient. Over time, inevitable market valleys give way to higher peaks. Staying focused on goals and maintaining a disciplined approach are key.
As always, we’re here to help you support your clients.
Thank you for your trust in Vanguard.