I want to begin by stating that our thoughts and emotions are with the people of Ukraine today, even if this email is going to be about your portfolios. It is our sincere wish that this war does not last long and that tranquilly is restored to Europe without delay.

We wanted to provide you a message that frames the situation, considering the unfavorable response from investors after yesterday night's escalation in the Russia-Ukraine crisis. As part of its aggressive strategy to strengthen its position in eastern Europe and weaken NATO's influence, Russia has taken bold steps. There is growing speculation that Putin's goal is to restore the Cold War-era power dynamic in Europe via Russia's hacking and shelling of Ukrainian military infrastructure. The West is reacting by planning further financial and economic penalties for Russia. Although these penalties are substantial, they are unlikely to have a meaningful effect on the global economy.

Ongoing disruption to energy, food, and the broader global supply system, which is already split because to the worldwide pandemic, is the bigger danger if the war escalates further. If this threat materializes, it may pose a threat to global economy and increase inflationary pressures. Looking on the bright side, when global economy is in jeopardy, investors flee to high-quality bonds for protection, which lowers yields and may convince central banks to delay raising interest rates and cutting economic support.

Whenever negative volatility feeds investors' emotional and cognitive biases, we use all that knowledge together with market history to set the scene. Despite the fact that every war is unique and this one might alter Europe's character, geopolitical market shocks since the '60s have mostly been temporary.

Benchmarking the Market

Despite how quickly the market has been declining, this should not be taken out of context. Over the last three years, we have been pleasantly surprised by the strong returns on US large-cap shares (100%) and global equities (75%) (until 2021).

At the time of this writing, the S&P 500 has fallen almost 11% from its 52-week high, returning it to its level in June 2021. Think about it: the S&P 500 has had 28 corrections (decreases of 10% or more from previous high) since WWII, typically one every two years, with an average reduction of 13%. Performance after one year: 9.3 percent on average. [Dow Jones Market Data] is the source.

Although their recent performances have been weaker than their historical norms, the other main US indices have been rather stable.

The significance of diversification has been reinforced by the comparatively good performance of international stocks outside of Europe. So far in 2022, global stocks have down around 10%, while shares in emerging markets have fallen 6.5%.

The Next Steps

How this war will develop is anybody's guess. For the time being, we think that making an emotionally-driven investing choice that is less than ideal poses a bigger threat to your objectives than negative market volatility. It is important to remember the following:

Importantly, stick to your investment policy statement's strategic allocations and your wealth strategy. Designed specifically for this occasion, these elements constitute your "business plan" and serve as a long-term, rational investment road map to your success. Consult your TC Capital Partners adviser about dollar-cost-averaging into this sell-off if you have extra cash on hand, are underweight in stocks, and are willing to bear drawdown risk.

Decrease exposure to risk via diversification. We have included exposures in TC portfolios that are meant to provide stability during periods of low risk. Core fixed income is a part of it. Many questioned this allocation throughout the bull market of the last three years, but it has paid off now that equities markets are falling. Each exposure in our carefully crafted portfolios is anticipated to contribute to the diversification of risk kinds and levels, as well as the opportunities they aim to capture.

If you want your portfolio to do well in the long run, you have to be willing to take some short-term losses. Neither the depth nor the duration of the present sell-off are known to us. Consistently following a methodical investment strategy (and not letting negative market volatility influence poor decision-making) has shown to be effective.

An increased amount of uncertainty is acknowledged by investor psychology, but more opportunities are expected to emerge. Despite the recent upheaval, we remain confidence in our risk management strategy, the potential possibilities already present in our portfolios, and the chances we are actively seeking for.

Everyone is attempting to make sense of the ever-changing scenario surrounding Russia's invasion of Ukraine and its potential immediate and distant effects on international economies and power dynamics. In real time, our 13-person investment team is collaborating with our global asset managers, drawing on their knowledge and resources to get insights. We will keep you informed as things progress.

How do I get started?

Start by scheduling a brief (15-minute) consultation with a Senior Portfolio Manager by clicking the "Discovery Call" option. During this conversation, we will assess your needs and provide you with a recommendation for our services. Following that, we will arrange an initial consultation to discuss your objectives, goals, purpose and intended legacy.

*Please Note: Limitations*

No client or prospective client should take the attainment of any professional designation, recognition by publications or media, or any level of success or experience as a guarantee that they will achieve a certain level of results or satisfaction if they engage TC Capital Partners to provide investment advisory services.

There are risks involved with investing based on the ideas given, and the information contained here may not be suitable for all investors.

To better understand the differences between investment advisory services and brokerage services, as well as TC Capital Partners responsibilities to disclose any conflicts of interest, we recommend that clients consult with a TC Capital Partners representative before making any purchases.

Any of the financial instruments mentioned above may include TC Capital Partners or one of its affiliates as a market maker, underwriter, representative, or lender to the issuer. TC Capital Partners or an affiliate may also own shares in the issuer.

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