There is a human tragedy to all wars that cannot be measured. Sadly, elites in positions of political power make war, but normal people suffer the consequences in their real lives. Let’s never forget that there is real human loss happening in the Ukraine that makes any problems we have in Canada that don’t threaten our lives seem inconsequential.

The rest of this note is economic (see chart directly below): The median reaction period to acts of war is 12 days with a median decline of -2.7%. Will that be the case this time? No one knows; in fact, the market went down a substantial 18.4% when Iraq invaded Kuwait, arguably a much smaller, geopolitically speaking, conflict. What we do know is that the yield curve (10 year Treasury rates minus 2 year Treasury rates) is positive, which is a tailwind for stocks, and any sell off in the market should be treated as a buying opportunity for rational long-term investors.

In our next commentary, which was originally slated to be this one, we will discuss the market changing forces of millennials, or the children of boomers, born between 1981 and 1996. They are now the largest demographic group and will influence many sectors and markets as they reach their peak consumption (read: spending) years.

Randy and Ian 

Chart source: RBC Global Asset Management, Investor Insights, Escalating tensions: How markets respond to acts of war