Close this search box.
BIS Cosgrove Accountants Gold Coast & Brisbane

Geopolitics & Fund Performance

One only needs to look back at the last decade to be reminded that history is full of surprises. From the early 2000’s to now, we have endured the 9/11 terrorist attacks, the Global Financial Crisis, Brexit, several wars in the Middle East and an ongoing global pandemic.

This is far from an exhaustive list, but hopefully the point is made – we are constantly adapting and responding to the unexpected. And just when we may be adjusting to this latest round of ‘normal’, we are facing yet another geopolitical crisis, this time with the war in Ukraine.

It is impossible to know how the situation in Ukraine will end. Russia appears to have a psychopath at the wheel who keeps his own counsel. And whilst the rest of the world has rallied around Ukraine, we still don’t know how the destruction of Ukraine and/or the Russian economy will affect global markets.

What we do know is that geopolitical risks increase market volatility, particularly in the short-term; investors often sell down assets in a perceived flight to ‘safer assets’. But if history has shown us anything, it is that markets can and will rebound strongly and often when we least expect it.

But don’t take our word for it. The below figure indicates how the market has responded to key geopolitical events over the last 60 years. We trust this provides some comfort during this latest crisis.

Please don’t hesitate to reach out to our trusted advisors if you have any questions or concerns about your own circumstances and position – we are here to help! Get in touch with us, give us a call on 07 5598 3800.

The material and contents provided in this publication are general and informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.