Using Your Investment Gains to Help People in Ukraine

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Using Your Investment Gains to Help People in Ukraine

In the days since the Russian invasion of Ukraine, many people have tried to predict what it will mean for gas prices, interest rates, or your investments.

There’s no harm or shame in that, at least not exactly. Self-preservation – and the associated instinct, wealth preservation – is an understandable impulse. It’s reasonable that forecasters try to reassure people and markets, even when forecasters regularly make mistakes.

But as with any act of military aggression that has the potential to shake world finances, an immediate question should be: Who is most likely to need help immediately?

It’s probably babies that hospital staff have had to take to basements, and people taking shelter in subway stations or fleeing their homes. Many of these adults didn’t have a 401(k) at all. Even those who have least among their neighbors can lose more than they ever thought possible.

If you’re reading this, you probably don’t belong. We are entering year 3 of a global pandemic but you are still alive even if you have lost people close to you. The job market is strong for those who want to work and feel safe doing it.

If you own a large, broad basket of US stocks, they’re up about 40 percent over the past two years, even after the recent correction. If you own a home, those prices are up at least 20 percent — over $50,000 for the median ones.

That’s incredible. Her net worth could well be higher given all the disease-related deaths, and it could stay that way as Russia’s invasion of Ukraine threatens to wreak havoc on world markets.

This is not a call to celebration, but a brief wonder that this could be your reality. And it’s true that the ability to dig deep to help others depends in part on what you have.

My colleague Jeff Sommer noted that stock markets posted large gains over the medium term after the Pearl Harbor bombing and the US invasion of Iraq. Investors also prospered during the Cold War years, even if millions of people suffered.

updated

March 3, 2022 6:32 p.m. ET

It wouldn’t feel good for most people to try to profit directly from these kinds of events, but sheer patience isn’t a moral failure.

On Thursday, as stock markets fell precipitously and then recovered, Michael Zawadiwskyi, a Ukrainian-American financial planner, said he dissuaded some clients from the idea that they should sell various investments to protect against potential losses. About half of his clients share his roots.

But he didn’t get as many calls as he expected. Aside from common heritage, he and his clients subscribe to universal principles of sound financial planning. They have their money in buckets of investments, some for now and some for later. They pay attention to risk and diversification. They don’t deviate from the plan unless radical changes in their own lives call for it.

And he knows his story. “I don’t think war will slow down the economy in the long term,” Zawadiwskyi said.

That didn’t stop him from staring in disbelief at images of tanks rolling through Ukraine and wondering what will become of their citizens. Most, he believes, haven’t packed their bags yet, especially in the western part of the country, where his family has roots.

“Where are they going?” said Mr. Zawadivskyi, a first-generation American who is part of a close-knit community of Ukrainian Americans in northern New Jersey. “I don’t even want to imagine what that will look like. I think they’re still determined to fight for what they have there.”

For now, if he and his clients are more concerned about people than the prospects for their investments, consider a similar stance. Because there is one thing we can predict with some certainty in the short term: people will need help.

Russia-Ukraine War: Important Things to Know

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A Ukrainian city falls. Russian troops captured Cherson, the first city captured during the war. The overtaking of Kherson is significant as it allows the Russians to control more of Ukraine’s southern coast and advance west towards the city of Odessa.

If you lost little—and certainly gained a lot—look back at your own family’s story of being helped. Even if your ancestors were never officially refugees, they likely experienced difficulties when moving from country to country.

It’s an old story, with new protagonists every year. For decades, Refugees International has focused on public policy and other initiatives that can facilitate their struggle. HIAS is another mainstay in this space, sending money to Right to Protection, its Ukrainian partner. Other established nonprofits are likely to mobilize as the situation worsens.

A few omnibus websites with ways to help are already doing the rounds, as are suggestions on social media. If recent history is any indication, there are tools and platforms that you can use to send money directly and electronically to those in need. Most of these efforts will work and are worth it. Scams will inevitably pop up too, so be careful and ask questions.

And if it helps, don’t forget that there can often be a direct correlation between your own gain and your goodwill.

You can donate valued shares to many charities and avoid paying capital gains taxes on those gains. You can move a bunch of stocks into a donor-recommended fund and spend it over time while recording any charitable tax deductions you might be eligible for. And if you have investment losses, deduct them if you can and think of tax savings as a grant to generous donations.

Maybe the invasion will affect your retirement or the price of filling your SUV, but maybe not. But other people are suffering a lot right now. Investing in them is one of the best ways to answer the question of what to do for Ukraine in the near future.