How to react to Russia’s war attack on Ukraine if you invest in the international stock market

Following Russia’s announcement of the start of a special military operation in Donbas, Ukraine, a geopolitical crisis has intensified that would negative impacts on the global economy. As has already happened, the United States has imposed economic sanctions on the country led by Vladimir Putin by cutting off access to trade and financing. This disrupts supply chains and makes essential resources scarcer globally, explained Golden Capital FX.

Some direct effects on the Peruvian economy, in relation to this conflict, would be the rise in oil and wheat prices, since Russia is one of the main exporters in the world of these goods. In addition, the supply chain would be affected because countries will have to avoid crossing the conflict zone, which would cause possible delays in exports and shipments. Let us remember that the economy is globalized, what happens in Europe and the US could have repercussions on national territory despite the distancestated the broker.

When international markets falter, lThe first thing to do is understand that the international stock market is very changeable and that is not always negative for those who invest in it. Those with experience know that this scenario could present unique investment strategies. The greater the volatility in the market, the greater opportunities to make capital profitable.

“A simple way to visualize the stock market at times like this is how to enter your favorite store and find everything with unbeatable discounts. Right now, the US stock market is going through a correction (a 10% drop from its peak), something that historically occurs every two years. When the stock market is going through times like this, one should not be alarmed, but should start trading”, said Renzo Centeno, director of sales at Golden Capital FX.

One of the alternatives that arise is trading in the stock market. At a time when the stock market is fragile, short-term investors could benefit from sharp market movements. The most attractive investments are in the most volatile stocks, that during these periods they are the ones who suffer most from an overreaction; that is, they are oversold and overbought. These are the actions that every investor with a short-term vision can take a position.

In times of uncertainty about the global economic future, investors always seek refuge in what are considered safe haven assets. Gold is considered the main safe haven asset and serves as a strategy to protect against fears about the future of the marketswe have been able to verify it in the price of the precious metal in recent days and during the pandemic. For example, since the beginning of the pandemic it was trading close to US$1,500 and, at the peak of the health crisis, it reached US$2,050. As we know, gold is a limited resource, difficult to extract and highly valued at a social level.

While the opportunities can be unique, the risks can also be high. In this scenario, Golden Capital FX recommended investing only surpluses or savings that do not compromise their payment commitments. Likewise, the investor must always be accompanied by personalized advice and a financial broker that connects him and keeps him informed about the events of the international stock market. Finally, it is essential that the trader is clear about his investment objective, his available capital and his risk profile. Events such as pandemics, wars and atypical crises should not alarm us and are often good opportunities to invest.