February started where January left off: market volatility, the “bricks” of real estate as a strong hedge, and the onset of war.
Let’s review these key investment stories from February 2022, to help you adapt and adjust while growing your capital.
War in Ukraine
Following a year of rising military tensions between Russia and Ukraine, Russia invaded Ukraine on February 24th, 2022, after months of military build-up at the borders.
Global effects from the start of the Russian invasion into Ukraine include:
- Global sanctions against Russia
- Refugee migration from Ukraine
- Possibility of nuclear war
- Market instability
- Rising gas prices
Stock Market Ups & Downs
Activity in the main markets continues the 2022 trend of extreme volatility.
- The S&P 500 fell 3.1% in February, delivering a second consecutive month of losses.
- Russia’s war in Ukraine has created a gigantic new source of worry for investors, but the factors behind the selloff go beyond just the war. They include concerns about higher inflation, impending interest rate hikes, and the slowing pace of economic growth.
- The CBOE VIX Volatility Index on March 1st was 33.32, summarizing February’s roller-coaster run and beginning the month bearing signs of increased instability.
EB-5 Visa Program in Limbo
The lapsed EB-5 Program continues to await re-authorization, with an expected renewal date of March 11th, should Congress not be too distracted by the war in Ukraine.
- The EB-5 program may finally see lasting legislative reform as soon as March 11, 2022. A draft of an EB-5 reform bill was leaked on March 7, 2022
- According to the leaked memo, the EB-5 regional center program will be reauthorized and would not require a subsequent reauthorization until 2027.
- Other changes to the EB-5 Program include: Changes to investment amounts; redefinition of targeted employment area: redefinition of high unemployment area; redefinition of rural area; addition of reserved visas for certain TEAs; changes to capital redeployment; and potential for priority processing for certain investments
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More on this story in our dedicated coverage next Wednesday.
Property Market Steadily Strong
The US real estate market, especially Florida, continues to outperform.
- Inventory is still tight across the nation, creating a seller’s market.
- Price gains are expected to be 5-10% nationwide in 2022 and higher in hot spots such as South Florida.
- Palm Beach County is reporting a 24.8% increase in median sales price year over year January 2021-22.
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COVID Restrictions Lifting
With more evidence showing Omnicron to be a less deadly variant of the coronavirus, communities, states, and nations are lifting social restrictions.
- Masking, social distancing, and capacity limitations are being lifted globally.
- Proof of vaccine mandates is being removed in many locales.
- Travel restrictions for non-essential travel are being lifted in many countries.
Rising Gas Prices
Gas prices have been rising dramatically throughout February and into March
- Average unleaded gas prices hit a record high of $4.17 per gallon Tuesday as crude oil prices skyrocketed amid the Russian invasion of Ukraine, AAA said.
- The figure is up from $4.07 a day earlier and nearly double the $2.77 recorded one year ago. The previous high of unleaded regular gas was $4.10 per gallon, set in July 2008.
- Gasoline prices have been on the rise for more than a month, increasingly sharply with Russia’s invasion of Ukraine on Feb. 24 amid fears of a disruption of Russian oil imports to the United States.
Let’s summarize the main investment stories from February 2022 – the key events and trends that affect you and your capital management.
- Volatility in the stock markets
- Potential & new opportunities
- Destabilization and rising gas prices
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