Uncertainty Rages On
With the month of March comes the beginning of Spring. There’s never any uncertainty about when Spring will arrive. The trees will begin to bud, the flowers begin to bloom, and the days become a little warmer, lighter, and usually a bit more wet. Considering the times we are living in now, we could use a some more certainty.
2 years ago, we were hit with a pandemic unlike the world has ever seen before. Entire countries and economies were shut down, and it took over a year for the world to begin to return close to normalcy. As 2022 began, many hoped that by summer, we would have returned to our pre-covid lives. Now we have another uncertainty arising this Spring in the form of war.
Russia’s invasion of Ukraine has devastated the people of Ukraine. Ukrainians have seen their homes destroyed and their lives forever changed. The invasion of Ukraine by Russia has created more uncertainty in a world that was already looking ahead towards the light at the end of the tunnel. Where will this uncertainty be felt hardest and most quickly for Americans and the rest of the world? Right now, it’s at the gas pump.
The Biden administration recently announced that they are sanctioning Russian imports of crude oil and natural gas. The potential impact of this move by the administration will be felt quickly, and painfully. AAA reported earlier this week that the average gas price in the US has already hit $4.15, surpassing previous highs from 2008-2009. Those prices could hit $4.50 within the next few weeks.
Inflation, which many had hoped would begin to ease, could see a sudden surge amongst an already painful year for American workers having to navigate life after the pandemic. While many experts hoped to see inflation dwindle down to close to 2.7% at the end of the year, this action might cause the number to jump almost 2 points to 4.5%. March itself could see an 8.3% year-to-year inflation number according to the New York Times.
Inflation has been hammering the economy for almost a year. While many hoped that 2022 could bring the end of such record-high inflation, it appears now that it might be something that American workers will have endure for longer. How much longer, and how much higher the inflation might rise remains to be seen. Uncertainty is, once more, another obstacle that must be overcome. Yet in these uncertain times we have faced and will continue to face, keeping calm and not overreacting or panicking is still the best solution.
Uncertainty often creates volatility, which often leads to panic. Now is not the time to panic, but rather, to be aware.
Considering the state of the world, re-evaluate your goals and strategies with your financial advisors. How is the level of risk in your portfolio? Is it too high? Do you need more cash flow within your portfolio? How much exposure to we have to Russia?
These are important conversations to have and now is a good time to re-evaluate what you are invested in.
