War in Ukraine Hits Home

6/1/2022

The conflict in Ukraine has been going on since mid-February and does not show any signs of stopping in the near future. Individuals across the globe are concerned at varying levels regarding this conflict, and the potential further issues this can cause. There is access to information and news regarding this conflict on every platform: television, online, social media, and print.

Despite the conflict being an ocean away, nearly three quarters of wealthy investors in the United States are concerned about the war in Ukraine. The percentage of investors concerned about the war in Ukraine is higher than those concerned with the stock market, gas prices, supply chain issues, taxes, and tensions with China. Only the current political environment and inflation are of greater concern to investors than the war in Ukraine.

What is the root cause of investor concern? Nearly half of investors indicate that their greatest concern regarding the war in Ukraine is the potential of the war escalating and involving other countries. This concern is higher among older investors, while 30 percent of younger investors feel the greatest concern regarding the war in Ukraine is the rising cost of fuel, compared to 10 percent or less of Baby Boomers and WWII investors that feel similarly. Stock market volatility is the greatest concern to only 12 percent of wealthy investors, although Gen X investors are slightly more concerned about that issue.

While investors mostly agree that this conflict is of great concern, it is more challenging to come to a consensus as to what the United States should do regarding the war in Ukraine. Forty-three percent of investors feel that the United States should continue sanctions and other economic restrictions, but do not have any military involvement, while 31 percent of investors feel that those same sanctions and restrictions should continue, but we should have limited military involvement.

Nearly three quarters of wealthy investors in the United States are concerned about the war in Ukraine, according to Spectrem Group research conducted in Spring 2022. The percentage of investors concerned about the war in Ukraine is higher than those concerned with the stock market, gas prices, supply chain issues, taxes, and tensions with China. Only the current political environment and inflation are of greater concern to investors than the war in Ukraine.What is the root cause of investor concern? Nearly half of investors indicate that their greatest concern regarding the war in Ukraine is the potential of the war escalating and involving other countries. This concern is higher among older investors, while 30 percent of younger investors feel the greatest concern regarding the war in Ukraine is the rising cost of fuel, compared to 10 percent or less of Baby Boomers and WWII investors that feel similarly. Stock market volatility is the greatest concern to only 12 percent of wealthy investors, although Gen X investors are slightly more concerned about that issue.

Only 13 percent of investors feel that we should greatly increase our military involvement in the conflict. Less than 10 percent of investors feel that the United States should not be involved in this conflict. Interestingly these sentiments do not vary much by political party, which is often where you see divergence on these types of issues. Women are slightly more likely to want limited military involvement than other investors.

While investors seem to have an answer as to what the United States should do regarding the conflict in Ukraine, there is less movement in any changes they have made themselves. Three-quarters of investors have not made any changes to their portfolio because of the conflict in Ukraine. That percentage increases as age increases, with 84 percent of Baby Boomers and 91 percent of WWII investors feeling this way. Some of the most common actions taken are increasing investments in cash and increasing investments in fixed income. Nearly a quarter of Millennials have increased their investments in fixed income, while 18 percent have increased investments in equities.

With half of Millennials making changes to their portfolio due to the conflict in Ukraine, it is important for investors of all ages to review their investments. Working with a financial professional can help provide valuable insights if any changes are needed to current investments.