As the Russia-Ukraine conflict continues to escalate, we’ve decided to alter our investment plan from the 10 year window to a plan for the next 24 months. Why? It is clear that inflation will explode even higher and new supply disruptions are going to be coming. Here are some key factors.
- Russia is being kicked off of the SWIFT banking system and that will lead to bank runs and production problems for all Russian goods and services. Russian oil & gas may not be sanctioned but it won’t matter if the oil & gas companies producing the oil and gas can’t pay their employees or pay for equipment to maintain operations. Expect oil prices to explode higher as long as this situation exists.
- Russia is expected to try back channels through China to get money moving but that too may have blow back by the US-China relations. In a worst case scenario, China goods and services flowing to the US may slow down or stop. The net result is supply availability problems and higher inflation.
- We have no way of knowing how bad things will get out of hand but panic buying across America will deplete inventories and send costs soaring higher as demand outpaces supply.
What does that mean for our investing strategy? We continue to look for value stocks paying consistent dividends and have been selling naked puts on stocks we want to pick up. We continue to invest in real estate (residential rental, commercial, and industrial REITs).
We will post our top picks soon but are waiting to see how this situation changes over the next month.
Don’t forget the Federal Reserve *was* expected to raise interest rates in March but the situation is so fluid now anything can happen. We expect March to be a highly volatile month.
Stay tuned and stay solvent.
[…] we wrote about Financial Planning for Next 24 months and today we wanted to cover some of the key risks US markets may encounter over the next 24 months […]