Michael Wagner in MarketWatch: What Cautious Investors Need to Know About the Ukraine Crisis
Russia’s attack on Ukraine has caused great turbulence, destabilizing the lives of millions and causing a ripple effect in the financial markets.
For younger investors looking decades into the future, the conflict may have little impact on your portfolio. Conversely, older, more cautious investors will have far less time to recover from losses and with larger amounts invested, mistakes may end up costing even more. To help cautious investors and investors over 50, MarketWatch recently spoke with Omnia Co-Founder and Chief Operating Officer Michael Wagner.
Older investors should know that inflation is here to stay. Wagner told MarketWatch that adjustments will need to be made for what he thinks is “the start of an era of inflation.” Wagner warns that inflationary cycles can last decades. “We really haven’t seen anything like this in 30 or 40 years,” he said.
The publication reports that the broad index of commodities—measuring the price of raw materials from oil to copper to wheat—just leapt another 4% Thursday, following news of the war’s dramatic escalation. It was already up 40% from a year ago. Markets are predicting higher prices for oil and gasoline, wheat, aluminum and many other raw materials.
While investors should be mindful of the risks the conflict brings, they should also be planning ahead and considering opportunities as well. This includes alternatives or real assets.
“We love (gold) because it’s so uncorrelated with other assets,” says Wagner, who recommends up to about 5% of client funds in the metal. He also likes broader commodity funds that invest in a broad basket of commodities through the futures market.