Facing Truth in Europe about the Ukraine War

 Finally seeing articles clarifying truths about war in Europe this weekend. The Guardian and FT had opinion pieces bringing clarity to the situation in Europe. Rolling Stone had a tremendous article by an in-country reporter. 

Putin is not at war only for Ukraine. The goal is to conquer Europe to take back most USSR territory and own the Black Sea. “He has weaponised food, energy and refugees.” The only option is to defeat him militarily per The Guardian. 

Belgium and eastern EU have a fantasy they can negotiate peace for land. Putin thinks he is winning. Looking at maps where Russia controls an eighth of Ukraine, would agree. Why else would he terrorize randomly shelling residential areas. Wants to scare people to surrender.

Putin warned on July 7 that “we haven’t even yet started anything in earnest” in Ukraine. Russia is not on war footing yet. In the Rolling Stone article Edward Lucas, of the Center for European Policy Analysis, “I think Putin’s aim is 1) to render Ukraine non-viable — crippled, uninvestable, in political social and economic torment, and 2) to show that the West doesn’t have the willpower to resist him.” 

FT points out the concentration of spending has been on expensive weapon systems and Europe’s confidence no one would attack NATO led to minimal stockpiles of artillery and other ground force weapons and little manufacturing to produce replacement quickly. Know from working on M-16 and M-203 production lines, the army paid to maintain production capability. We may have lost that knowledge. How quick can we ramp up production in Europe and USA? 

We have many issues to solve beyond providing weapons, and more are needed to stop the war. Feeding the world without Ukraine and Russian production. Europe may have low-income and pensioners freeze to death if we can’t get more natural gas there and find ways to generate more electricity this winter. 

Likely we will be in this war after Putin passes away. He set this up as his legacy. We also need to watch other dictators who want their legacy.

This is War

Ukraine was invaded. By a Tyrant who has done this repeatedly. Georgia. Crimea. Now planning to take over Ukraine. 

People believe negotiations will work? Every cease fire has been broken. Listen to his terms. Putin’s offers are not serious. He is only negotiating to get time to resupply his troops. The plan is to keep attacking. Russia is wants to cut off Ukraine from the Black Sea.

Hitler and other tyrants negotiated and then conquered the countries negotiated deals with. The WW2 veterans I worked with would recognize this situation.

The West has to provide Ukraine with offensive weapons, artillery, drones, bombs and more. Ukraine needs to attack Russian troops and supply lines in Russia. Ships have to be attacked off shore. The fight has to be taken to the aggressor. Crimea and occupied lands need to be taken back.

Do not say this lightly. War is a horrible experience for everyone involved, military, civilians and innocents. Fighting back will take years. 

This is not going to be resolved quickly. The world needs to be saved again.

Tyrants have to be defeated. Or next Putin invades Europe.

Changing Situation and Financial Investments

The high inflation numbers. Fed is going to start raising interest level. Stock market has been volatile changing daily. Worse market is down today. Loud screamers advising sell everything or buy everything. What to do? 

First don’t panic. It is a change in the market. Making drastic or daily moves are not the best idea. No one really knows what the market will do. I have concerns and made changes to my 401K yesterday. Will explain what and why below. (Not a financial adviser. My knowledge is reading a lot of financial articles and subscribing to an advisor)

 

Interest rates were lowered or held low by the Federal Reserve since 2008. Now that inflation has shot up to 7.5% in January the Fed will reacted by raising rates.  An increase from 0-0.25% is way overdue. 3-4 raises to 1-1.25% will not trash the economy this year. Long term the Fed historically overshoots, but may take quite a while.

 

However rate increases will affect bonds, the stock market and possibly slow real estate down. Existing bonds lose value as new bonds with higher interest rates are issued.  Bond market is much larger than the stock market with more transacted daily. The stock market grew ~21% in 2021 as the Fed injected liquidity and low rates. Now the stimulus is being withdrawn and rates going up may affect parts of the stock market more.

 

All I did is move 15% of bond funds into a stable value fund. I moved 30% of stock index funds into actively managed funds. 20% to 2 international investment funds and 10% added to Target year fund.  Closed index fund and Russell 2000 fund. More fees, but experienced management should perform better for the next few years than growth or index investing. Now have 7 different funds in 401K. Am working and contributing. Expecting savings growth despite stock market corrects. Next year will evaluate again.

 

Making investment changes is not an all or nothing approach. No one should be 100% in stocks this year. Nor go to 0% stocks. Be diversified. You could invest in short term bonds up to a year or high interest rate savings instead of stable value funds, but I did not have those options in my 401K. You need to evaluate what you hold and make small changes to balance things out.

 

Think about your retirement funds and make small changes to lower your risk this year. If you are concerned about your situation, get a fee based Fiduciary. For retirees recommend Mauldin Economics Strategic Portfolio (Jared Dillian). Investments are typically 20% stocks, 20% bonds, 20% real estate, 20% commodities/precious metals, and 20% cash for a resilient portfolio. Minimize risk while earning money on your savings.

 

Hope our investments grow this year, but preparing for different times.