I didn’t learn anything about the nation of Ukraine when I learned geography in high school. I suspect
most of us didn’t. When I was in high school there was no independent nation of Ukraine. From 1950
through 1991, there was only a Ukrainian Soviet Socialist Republic, a part of the Soviet Union.
Recalling Soviet times
Why is Russia still so powerful? The main answer is natural resources.
Western Europe has evolved in a different direction from Russia. The European Union was founded on the principle of peace through interdependence. The history of Europe is rife with war but has shown consistent peace between trading partners. Historians debate whether trade was the cause or the effect of peace. Germany, notably, but other countries too have tried to persuade Russia that peace through mutual interdependence was the way to a prosperous future. Russia, however, continues to believe that peace is maintained through military strength, the economic dependence on Russia of foreign countries, and a physical buffer in the form of a border of vassal states.
What does Russia have to gain and what do they have to lose? Invading Ukraine will have major costs. Controlling a country the size of Texas with 44 million inhabitants will take manpower and resources. When NATO forces went into Kosovo in 1999, the Washington Post reported that NATO used a formula of one soldier for every 40 inhabitants to keep the peace. If that formula holds, it will mean a commitment of more than 1.1 million Russian soldiers. Russia currently has 900,000 soldiers on active duty. Ukraine on the other hand, has more than 350,000 active-duty soldiers. On paper they’re no match for Russia, but local insurgencies have defeated great military powers many times over the years. An occupation of any duration would likely prove too costly for Russia to bear. Russia’s achievable goal
may only be regime change, though Ukraine’s population may not acquiesce. With nothing to gain economically and a heavy price to be paid in lives and costs to maintain control, most experts expect Russia’s occupation to be short lived and limited in scope.
What does it all mean to my bottom line?
I’ve attached below a list of major historical events going back to the start of World War 2 and their impact on the stock market. Following these 37 events, 22 times the market was down one month later, 15 times markets were higher. Looking out one year, markets were lower 12 times but higher 25 of 37 times. Since the start of the 21st century stock markets have told an even clearer story. There have been 15 such events with positive markets one month out 10 times, positive three months out 11 times and positive one year out 10 out of 14 times with the pull out from Afghanistan being only 5 months ago.
There is no need to reach out to us. However, we are always available if you would like to have a conversation regarding this topic via email at Andrew Betts at Andrew.Betts@bickling.com; Spencer Betts at Spencer.Betts@bickling.com, Dorothy Bickling at Dorothy.Bickling@bickling.com, Bruce Goodman at Bruce.Goodman@bickling.com or at 781-862-9792.
Investment Advice offered through Bickling Financial Services, Inc., a registered investment advisor. Securities offered through Purshe Kaplan Sterling Investments, Member FINRA/SIPC Headquartered at 80 State Street, Albany, NY 12207. Purshe Kaplan Sterling Investments and Bickling Financial Services are not affiliated companies.