War in Ukraine, sanctions on Russia will impact economy and personal investments in U.S.
“The problem is the stock market does not like uncertainty, and when there’s uncertainty, the stock market reacts,”
CHARLOTTE, N.C. (WBTV) - The United States has said it will not send troops to Ukraine, but people will still feel impacts from the war when it comes to the local economy and investments.
Experts tell WBTV if this war drags on and the sanctions on Russia become greater, this could mean significant impacts on the U.S. economy and our personal investments.
“The problem is the stock market does not like uncertainty, and when there’s uncertainty, the stock market reacts,” said Steve Cox, Professor of Business Administration, McColl School of Business at Queens University at Charlotte.
When Russia invaded Ukraine this week, the stock market dropped, but has rebounded. The volatile market has some people concerned about their investments.
“If you can withstand the ups and downs then this too shall pass, if you believe in the American economy which I do, we’ll be able to weather this storm,” Cox said.
Professor Cox said younger people may be more inclined to wait things out with the stock market, but older people or those in need of money may want to look at other options.
Chris Miles with Money Ripples says people may want to consider stable and conservative options to move their money.
“It could be bonds, money markets, I mean the most they will be cash even they don’t make anything and people worry about losing to inflation. The thing I remind people is that losing to inflation is not the worst-case scenario, you know, losing 20% or more in the stock market and then losing to inflation is a worst-case scenario,” Miles said.
As for people living paycheck to paycheck or with investments in their 401K, Miles gave some advice during this time of uncertainty.
“This might be the time to stop contributing to your 401k. This might be the time to instead, bring that money home, keep it in savings. Keep it from running up high-interest credit card debt, because why put money in a 401k if all said you’re going to run up credit cards because you can’t afford day to day,” Miles said.
Miles’s advice to everyone is to make sure your personal finances are in order right now and not worry about the national economy because it’s something we personally can’t control.
If this war is short-lived, that likely means a better outlook for our economy and investments as the price of oil and other commodities should normalize.
It is always a good idea to talk to an investment professional before making any moves with your money.
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