The war between Russia and Ukraine has ripple effects all around the world. Even though the conflict is now contained in one country, there are consequences associated with it, including higher commodity prices, geopolitical uncertainty, and also the inability for many businesses to conduct daily operations due to the sanctions imposed recently.
However, some people continue to invest and trade in the financial markets, especially now that higher volatility leads to numerous opportunities. However, ethics and ideology remain a focal point for many. Thus, it would be appropriate, given current conditions, to consider several tips for how to invest, while not supporting the Russian war effort.
Alt-text: investing during the Russia-Ukraine war
Tip #1 Avoid trading commodities
As a result of the war, commodity prices surged higher, such as nickel reaching unprecedented levels. Russia in particular is a large exporter of commodities such as oil and natural gas. When traders panic and buy these assets, they are actually helping those who sell them.
Moreover, trading/investing in commodities is very challenging right now, as prices are very volatile. Even the price of oil has retracted from recent highs, although the Ukrainian war shows no signs of abating. Leaving these assets aside until things settle down means not exacerbating a trend that has already gone a long distance, threatening the energy security of the Western World.
Tip #2 Trade using derivatives
Rather than trading physical assets, regardless if it’s about stocks, commodities, bonds, and indices, traders could choose derivatives like CFDs. XProMarkets and many other reliable brokerages in the market offer access to such instruments for the wider public.
Also, because these assets only follow the underlying instruments, without having an impact on the price, it would be possible to take advantage of price movements and not be a driving force in the market.
Based on experts working for XPro Markets, a lot of people are choosing to trade CFDs nowadays, simply because it’s affordable and convenient. Opening a live trading account can be done fast and the financial resources required are low. Financial markets gain popularity among those who have nothing to do with the industry, yet are eager to learn how to get involved.
Tip #3 Focus on markets less affected by the war
Since the war is now isolated to Ukraine, despite a poor risk sentiment around the globe, capital is fleeting to places that are not in the center of attention. US stocks and assets are seen as a place of refuge. All major stock market indices are down from the all-time highs, but compared to European indices, they are still in a better position.
At the same time, as sanctions are being imposed on Russia, other countries will have to compensate by exporting more. Traders should find a lot of opportunities in sectors like energy, agricultural commodities producers, materials, and others.
As a result of the aggression, many countries are aiming to cut dependency on Russia over the upcoming years. It won’t be an easy task, but strong political commitment in that direction is obvious.