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One of these decades, we’ll have an economic cycle that plays out in a textbook way.

For now, we need to keep adapting on the fly to global events. Two years ago, the pandemic hijacked the economy. In 2022, Russia’s invasion of Ukraine has the potential to do the same.

As this year began, the consensus was that interest rates were going to press steadily higher throughout the year and likely in 2023 as well. Now, with oil prices surging in a way that threatens to undermine global economic health, there’s a sense that rates may not rise as fast or as much as expected. Conservative investors, you need to re-think two aspects of your investing approach.

One is the idea of waiting for rates to rise so you capture better returns from bonds and guaranteed investment certificates. Bond yields began a strong push higher last fall, but the war in Ukraine has resulted in a mild reversal as money flowed into bonds. Investors hated bonds just over a month ago. Now, they’re a refuge for nervous money.

The price of bonds and bond yields move in opposite directions, which means more love for bonds will result in still lower yields. Looking for a GIC to add some ballast to your portfolio in these uncertain times? Several alternative banks had a 2 per cent one-year GIC available as of the second week of March, and a few offered 2.1 or 2.15 per cent.

Five-year GICs from alternative banks went as high as 3.15 per cent, but there’s no need to lock in your money for that length of time when you can get 2.9 to 3 per cent for three years at some alternative banks.

Another aspect of your investing strategy that may need a rethink now is the weighting of bonds in your portfolio. It was common over the past two years to hear that the 60-40 mix of stocks and bonds was dead, and that investors either needed to reallocate to stocks or tweak their bond holdings to be more resilient in a rising rate world.

The war in Ukraine reminds us why a conventional 40 per cent bond weighting isn’t quite the mistake it was made out to be. Rates are still going to rise, and that will put downward pressure on the price of bonds and bond funds. But when events like the pandemic or the Russian invasion jolt markets, bonds have definite appeal. From where we are today, there seems to be more risk to stocks than bonds in the months ahead.

-- Rob Carrick, personal finance columnist

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The Rundown

A plunge in emerging market stocks suggests the TSX is in trouble. But there’s a new twist

The drubbing emerging markets have taken since last month would normally be really bad news for Canadian stocks. There is, however, reason to believe that this time is different. Scott Barlow explains.

What a TD top market pro sees ahead for stocks, bonds and an investing landscape that’s turned upside down

Investors are facing a tremendous amount of uncertainty, weighing heavily on stocks and market sentiment. Even before Russia’s invasion of Ukraine, there were days of extreme market pressure as investors contemplated the next moves of the U.S. Federal Reserve and other central banks amid spiking inflation. But Michael Craig, head of the asset allocation and derivatives team at TD Asset Management, argues that the current market volatility can be a positive, as it reinforces “market discipline.” And in this interview with Jennifer Dowty, he provides a cautiously optimistic outlook for longer-term investors.

Which Canadian stocks are facing turmoil because of war in Ukraine?

With about 30 per cent of the Canadian benchmark index weighted in resource stocks, soaring commodity prices have translated to double-digit gains in the energy and materials sectors over just the past two weeks amid the war in Ukraine. But the selloff is happening here, too. It’s just less visible. Tim Shufelt looks at the stocks, sectors and styles that have proven most vulnerable to the recent market turmoil.

Short sellers left stranded: Why bets against Russian stocks have backfired for some international investors

Short sellers have scored a huge year-to-date gain of US$723-million on dozens of Russian stocks listed on foreign exchanges as ADRs or GDRs, according to a report from S3 Partners Research. But the short sellers can’t cash in on their good fortune and claim their winnings just yet; by the time they get the chance, a considerable portion of their gains may have gone up in smoke. Larry MacDonald explains.

Buying the dip? Beware - this time it’s not going to end well

Buying the dips as a strategy has worked well over the past 10 years – primarily with the help of the U.S. Federal Reserve. Such an approach to investing has worked because none of the secular forces behind inflation, real interest rates and globalization had changed. But value investor Dr. George Athanassakos believes buying the dips may no longer be as safe a strategy as it was.

Euro’s pain is U.S. dollar’s gain as Ukraine war roils markets

Fallout from Russia’s invasion of Ukraine may be setting the stage for more gains in the U.S. dollar, upending investor expectations for a weaker greenback as geopolitical uncertainty and worries over European growth raise the U.S. currency’s appeal. A sustained rise in the dollar could have broad implications for markets and the economy.

Amazon latest megacap to join stock split squad

Stock splits are becoming fashionable for megacap U.S. companies. Amazon unveiled a 20-for-1 stock split late on Wednesday, only weeks after megacap peer Alphabet did the same. Will the splits ultimately benefit their stock values? Lewis Krauskopf of Reuters suggests they just might.

Ukraine crisis raises questions about shifting imperatives for socially conscious investors

If you’re an investor who wants to put your money where your values are, the Ukraine crisis raises both technical issues about divesting Russia-linked securities and deeper questions about what it means to be socially responsible in times of war. The Globe’s Erica Alini looks at some of the thorny issues the war has raised for investors.

Also see: Russia’s invasion of Ukraine is a wake-up call for investors

Do’s and don’ts of borrowing against your home equity to invest

Canada’s richest families have leveraged their assets to grow their net worth for years. But for regular financially secure Canadians, borrowing to invest is too often dismissed. Robert McLister has some key points homeowners should know if they are considering using their home equity to invest in stocks and other assets.

Others (for subscribers)

Number Cruncher: Nine U.S.-listed stocks for an inflationary market

Number Cruncher: These S&P 500 stocks show value relative to their sector peers

Friday’s analyst upgrades and downgrades

Friday’s Insider Report: CEO invests another $1-million in this oversold dividend stock

Thursday’s analyst upgrades and downgrades

Globe Advisor

Canadian home bias prevails despite pandemic foreign investing spree

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Ask Globe Investor

Question: I purchased PHN Total Return & Short Term Bond Funds years ago. I never did switch to bond ETFs. Is it too late? Should I hold them? Sell? – W.D.

Answer: If you’re going to own bond funds right now, staying short-term is the best way to mitigate risk. But even quality funds like the Philips, Hager and North Short Term Bond and Mortgage Fund are in the red right now. The fund dropped 2.1 per cent in the year to Jan. 31. That’s about the same loss incurred by the iShares Core Canadian Bond Index ETF, so there is no reason to sell the PHN fund to buy an ETF.

The PHN Total Return Bond Fund was off 4.8 per cent in the year to Jan. 31. That was to be expected because it holds bonds with longer maturities, which are more sensitive to interest rate movements.

What should you do? It depends on your goals and time horizon. If you’re a long-term investor, you might want to retain your positions, although the next couple of years could be rough. Alternatively, consider moving to a modified GIC ladder.

-- Gordon Pape

What’s up in the days ahead

Robo-advisers are a great option for investors willing to pay a modest fee to have pros build and maintain a portfolio of exchange-traded funds for them. But Rob Carrick will tell us why Wealthsimple’s liberal use of a BMO bond ETF shows the importance of staying on top of what’s in your portfolio and understanding why.

Central banks thrown a curve ball (again): World market themes for the week ahead

Click here to see the Globe Investor earnings and economic news calendar.

More about Globe Investor

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Compiled by Globe Investor Staff