George Osborne warns City to prepare for turmoil over Russia

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Chancellor says action on Ukraine could have a significant impact on City of London.

http://www.telegraph.co.uk/finance/economics/10761...

Should those of us invested in particular funds (I suppose equity heavy ones) and shares be worrying?

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Simpo Two said:

Markets aside, it's amusing to think we can worry Russia with 'sanctions' when they could screw us royally if they so wished.

Blame the lefties for not wanting nuclear power.

But higher interest rates will be nice

Of course, but Russia does rely overly on gas sales AFAIK.

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Funk said:

Apparently none of our gas comes from Russia at the moment, but the knock-on effect of sanctions or supply threat in the EU could have nasty shocks that would affect us.

Yes, it's not a huge amount of gas that comes from Russia to the UK. However as you say, if those who are reliant on Russian gas (Poland uses 90% Russian gas IIRC) have big problems I feel like the knock on effects could be quite huge. I have a few shares in companies, and some money in small/unconstrained funds... part of me feels like it might be wise to more or less stay in cash for the next 6 months or so and see how things play out. Surprisingly there doesn't seem to be a huge amount of commentary about this.

Perhaps fund managers ought to be looking to close positions where appropriate on their investors behalf? I'd imagine though that it's pretty hard to shift the large amounts of cash they're often managing.

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Ginge R said:

If you like the idea of investing in Russian mining, this sort of risk is something that you should be happy with before you sign the paperwork. If you are worried about it, your capacity for loss is probably not as high as your capacity for risk. I'm not suggesting you shouldn't avoid the rapidly looming car crash if you can see the brake lights all coming on in the fog ahead, but if you're that risk averse, maybe something less spicy would be better - do you really need to be trying to shoot the lights out or might you come a cropper, by taking excessive risk needlessly?

If you're in moderately heavy funds across the board, then this was always going to be a year of volatility anyway. The uncertainty that we have seen over the past few months is evidence of that. If you have an investment timeline that is consistent with some short term choppiness, if you factor in all the pros and cons, then (sorry!) "it isn't timing the market, it's time in the market that counts". Regular payments, drip feeding into well managed funds when units are being accrued at a modest discount win't do many investors harm over the medium/long term - if they were right for them in the first place.

Take a view on holding your nerve and remembering that investing is all about taking a measured, longer term perspective anyway. Now might be a good time to see where you can trim the cost base, do a little research on options and learn any lessons you're experiencing now, in case this happens again - have a contingency in place for the next time (which might be a little closer to your investment timeline exit date anyway).

Thanks for your post. I'm new to investing, I have always been very good at saving but never thought to put my savings to work until more recently. I've traded a bit over the last 18 months with a smallish amount and done fairly well, however after that investing in a fund feels quite at arms length as I'm not able to just pull my money out at a moments notice. After the budget the outlook for the UK seemed broadly positive to me so I thought it made sense to invest in a UK fund or 2 longer term, however the 'turmoil over Russia' has sown some doubts. My timeframe is not short, more than one decade quite possibly if things continued to make sense so concern over a few % is probably unwarranted.