February 25th, 2022 Market Commentary
As promised in the text we sent out this morning, with the world events that are unfolding at this time due to the Russia/Ukraine conflict and how this may affect the markets, here is the Market Commentary. We have also scheduled a webinar for Saturday, February 26th at 11am Central Standard time to allow us to go into more detail. Click here to reserve your spot.
The markets did not react nearly as negatively as many expected today from the Russian invasion of Ukraine. This could be partially due to the markets waking up to the fact that Ukraine’s GDP is ONLY approximately $155 billion annually and Russia’s is ONLY $1.5 trillion annually. The annual GPD for Texas alone is $1.75 trillion or, on the world stage, the U.S is $21 trillion, Japan $5 trillion, and Germany $3.7 trillion of GPD annually. In other words, Russia’s and Ukraine’s GDP combined is just not enough mathematically to make much of a difference at all. But, if Russia keeps going into neighboring countries and this turns into a world war it would be a different story. I do not believe this will happen because then Russia is against the world including superpowers that can defend themselves, unlike Ukraine.
There are many other underlying issues that have put the markets where they are today which I will provide in the webinar Saturday. Again, click here to reserve your spot.
With all this in mind, we are now in a great position to start taking advantage of buying opportunities which we have been waiting for since September of last year when we peeled off some of our equity positions when the markets were at all-time highs. We cannot let you know exactly when we will be adding to equity positions at much lower prices than when we sold but you will get a notice when we have made the moves.
In the meantime do not let short-term negative returns and panic get in the way of a long-term strategy.
Our Biblically Responsible Portfolio Positions at this time
- Aggressive Portfolios: typically 98% to 99% equity/stock positions are presently at 82.5% equity/stock positions with the remainder in cash.
This portfolio’s Risk Number2 is 75, which means the Acceptable Six-Month Risk is -16.63%.
- Growth Portfolios: typically 80% equity/stock positions are presently at 66% equity/stock positions with the remainder in cash and fixed income.
This portfolio’s Risk Number2 is 67, which means the Acceptable Six-Month Risk is -14.18%.
- Moderate Portfolios: typically 50% to 60% equity/stock positions are presently ONLY at 36% equity/stock positions with the remainder in cash and fixed income.
This portfolio’s Risk Number2 is 52, which means the Acceptable Six-Month Risk is -10.23%.
- Conservative Portfolios: typically 20% to 25% equity/stock positions are presently ONLY at 20% equity/stock positions with the remainder in cash and fixed income.
This portfolio’s Risk Number2 is 45, which means the Acceptable Six-Month Risk is -8.14%.
- Ultra Conservative Portfolios: never have equity/stock positions but are always in cash and fixed income.
This portfolio’s Risk Number2 is 37, which means the Acceptable Six-Month Risk is -6.11%.
In closing, rest assured we are consistently monitoring events, the markets, and all our portfolios hourly, daily, and many times into the late evenings as well as very early in the mornings for your benefit as our clients.
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If you would like to discuss this, please email us or text/call us at 830-609-6986.
CEO, Christian Financial Advisors®
Wealth Advisor, Christian Financial Advisors®
1 GDP values obtained from both https://tradingeconomics.com/ukraine/gdp and https://worldpopulationreview.com/state-rankings/gdp-by-state.
2 All Risk Number volatility percentages are based on 95% Historical Probability for six months and are used by our firm to remain as objective as possible in our professional investment management decisions. These numbers are from Riskalyze, a professional, paid advisor tool we use as a firm.