As many of you are aware, the markets in 2022 have certainly started with a rocky beginning. The noise will have you believe this is a direct result of inflation, impending interest rate hikes or the Russia – Ukraine conflict. And, perhaps, some degree of this market volatility can and should be attributed to these events.

The market does not like uncertainty, and these events generate a lot of uncertainty. However, uncertainty provides long-term investors with opportunities. As a point of interest with respect to the Russia – Ukraine conflict, the reported GDP of Russia is slightly less than the reported GDP of the State of Texas and the GDP of Ukraine is less than 4 months of Walmart sales. This helps put into perspective the worldwide economic impact of this invasion. From our perspective, the US treasury and it’s decisions in the coming months will have a much larger impact on the economy than the current conflict in Ukraine.

Global financial markets have responded in a somewhat expected and orderly fashion in recent days. Volatility has increased and global equities have sold off. We want to reiterate that as long-term investors, you own portions of great businesses and the future cash flow of those businesses. Having this perspective during volatile times is extremely important. It’s important to remember that we cannot and do not pretend to predict what will happen in the short-term, and we don’t let short-term noise direct our decision making. We will continue investing your money with this perspective.

We are likely to remain in a period of elevated volatility and markets may remain vulnerable in the near-term as developments in Europe unfold. However, history has taught us that military conflicts tend to have a market impact that is limited in magnitude and time. As a result, while we are unlikely to shift around portfolio allocations in a meaningful way, we are always seeking to increase the quality of the businesses you own, and volatility can sometimes bring opportunity.

Having said all this, we view these periods of instability as potential opportunities for clients to review their short mid, and long term goals, to ensure we stay on a path that provides peace of mind while pursuing these goals.