Here's How Markets Have Reacted to Conflict Historically
Written by The Inspired Investor Team | Published on February 25, 2022
Written by The Inspired Investor Team | Published on February 25, 2022
It's no secret that markets don't like uncertainty. It's also no secret that markets have been facing a lot of it lately as a result of the pandemic, inflation fears and more recently, Russia's attack on Ukraine.
While there's no way to accurately predict how long uncertainties will persist or how markets will react in the future, it can be helpful to take a look back to gauge how markets have responded to major events in the past. With the help of RBC Global Asset Management (RBC GAM), here we'll focus on equity market reactions to acts of war and terrorism.
In a recently released commentary, RBC GAM noted that acts of war rarely have large or lasting impacts on markets, though periods of heightened uncertainty are common. The following chart looks at how U.S. equity markets have reacted historically.
RBC GAM highlights a few specifics to take note of:
Again, while past reactions don't determine what will happen in the future, they can provide some context to help us boost our resiliency as investors when markets are volatile.
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