The statement by Russian President Vladimir Putin that he would launch a military operation in Ukraine threw global markets into a tailspin.
Putin launched a military campaign in Ukraine on February 24 and cautioned other countries that interfering with the Russian campaign would result in unimaginable repercussions.
The escalating worry about the Ukraine conflict has driven global stock markets into a correction phase.
Market analysts advise investors to wait and see how the situation develops before making any major decisions.
They also recommend that buying be limited to companies or segments that are reasonably priced or even have good earnings prospects.
It had never been a smart idea to sell during a crisis.
As a result, investors should avoid panicking and selling.
Despite the fact that the situation is changeable, this is difficult to turn into a long-term hot battle. Investors should not liquidate their major stocks in a frenzy.
I am assuming markets might correct another few percentages from this week if the crisis turns into a fiery conflict, which is doubtful.
However, the market is more likely to consolidate around current levels, with individual stocks increasing from current levels.
The influence of the Russia-Ukraine conflict on the Dhaka Stock Exchange (DSE) was merely a pretext to drive the market lower, observers argued, because these two nations' economic presence in Bangladesh is minor.
These two nation’s war has no direct influence in our capital market but it might impact on regular investors who may have sold shares in order to avoid more losses.
However, the war has had a negative impact on global oil prices, which has harmed the worldwide economy.
Also their war has an impact on wheat and world metal production, such as copper and iron.
On February 24, the Russia-Ukraine war had a massive impact on the global stock market.
Beginning of this week these war issues hit our Bangladeshi stock market as well.
On February 27, the price index at the Dhaka Stock Exchange (DSE) fell sharply.
The DSE's main price index, the DSEX, fell 163 points or 2% and the points became 6676.14.
The amount of transactions in the DSE has also come down that day.
The downfall of DSE started from this day.
On March 3 DSE's main index, the DSEX, was down 3 points to 6,696 points.
Other indices like the DSE Shariah Index were down by a point. The DS30 Index dropped to 2,462 points.
Between February 27 and March 3, DSE lost almost 20 points, which was a big downfall of our stock market.
On March 3 the DSE score was 6,696.
It dropped to 6,638 points the following week (March 6).
About 58 points went down further on Sunday of that week.
On Tuesday, March 7, the points dropped to 6,456.
It dropped about 182 points compared to Sunday, which was a big blow to the share market of this country.
However, at the end of the week, the points of Thursday's bar rose slightly to 6,668.
Those were two of last week's overview of our stock market.
Last week, it increased to 6,765 points, almost 97 points more than the previous week.
And the points have been almost equal for the last two days.
On March 15, this point came to 6,765. This rising rate is almost constant.
But I do not think this constant growth will be the same this week.
I am assuming that this week our stock market (DSE) will decrease some more if Russia and Ukraine do not come up with a decision and settle down their issues.
Now let me discuss in this situation what investors should do in this situation.
It's time to invest in high-quality stocks.
Considering the fact that the biggest indices are only down about 10% from their highs, several stocks have lost dramatically.
This is the time to develop a 3-5-year time frame portfolio of large and growth stocks.
Stay set and don't worry if you're terrified to do it or if you've put your heart and soul into it.
If you're keeping the highest beta, small cap names, it's time to switch to quality, as the simple money era has ended or is going to expire.
Possibility of amassing high-quality stocks
Although this situation has been going on for the last three weeks, I don't think the current state of uncertainty will last much longer, because the situation is one-sided and likely to be resolved on the negotiating table shortly, conservative long-term investors should take advantage of this drop to build a portfolio of high-quality long-term equities in a phased manner.
Traders should ignore this market since it has a risk-reward ratio of 1:1.
Wait-and-see approach
All investors should adopt a wait-and-see approach and refrain from making any new investments at this time.
Once the global situation settles down, long-term investors with a 3-5 year investment period will have an excellent opportunity to rebalance their portfolios.
Stop loss method
It's a very known method to all.
We all know about the current market.
Suppose you are at a loss by buying a share, and you are expecting the price of another share to rise, then you can sell your share and buy that share so that you can repay your lost money through new shares.
Those are some suggestions that an investor should do during this period to avoid their losses.
Just not to our stock market, it might hamper our economy.
If the existing conflict between Russia and Ukraine escalates into a full-fledged war, prices of homegrown fuels such as CNG may rise even more, necessitating an increase in the number of subsidies on LPG and kerosene.
Bangladesh and Russia have a strong economic and trade relationship.
Bans imposed by the global community on Russian enterprises and banks will undoubtedly have an influence on our economy, either directly or indirectly.
The writer is a student of finance at North South University