Barefoot Investor Scott Pape issues an urgent warning to Australians amid Russia-Ukraine conflict

Bestselling money author Scott Pape is warning Australians to avoid panicking as Russia’s intimidation of its Ukraine neighbour turns off investors.

The Australian share market has plunged by 2.3 per cent during early trade on Thursday, in response to Russian President Vladimir Putin sending troops into Luhansk and Donetsk in the Donbas region.

A full-scale Russian invasion of Ukraine, a liberal democracy, could encourage authoritarian Chinese President Xi Jinping to invade Taiwan.

Pape, better known as the Barefoot Investor, has told a reader to be more worried about inflation than geopolitical turmoil.

‘I have absolutely no idea what Putin or Xi will do, or the effect it will or won’t have on the market,’ he said.

‘After all, who’d have thought a global pandemic would cause a boom in the share market?!’

Australia’s headline inflation rate of 3.5 per cent is well above the Reserve Bank’s 2 to 3 per cent target, with Westpac and NAB now expecting official interest rates to be raised later this year instead of 2024.

Pape said heightened inflation, which last year reached the highest level since 2008, was a particular risk for retirees and those on fixed incomes. 

‘I am very sure that by pouting about Putin you’re overlooking your biggest financial risk: inflation,’ he said.

‘If you’re retiring on a fixed income, you need to ensure that money won’t be whittled away.’

Pape urged Australians to invest in stocks that benefited from higher inflation. 

‘So, how do you outrun inflation? Generally by investing in businesses that can put their prices up,’ he said.

The Australian share market has plunged by 1.9 per cent during early trade on Thursday, in response to Russian President Vladimir Putin sending troops into Luhansk and Donetsk in the Donbas region (pictured is a convoy of Russian military trucks moving towards to border in the Donbas region)

‘Of course, doing that buys you a ticket on the stock market rollercoaster … which will work out so long as you don’t jump off mid-ride.’

In a rollercoaster end to the trading week, the Australian share market’s benchmark S&P/ASX200 fell by 2.3 per cent, sinking to 7,037.4 points during the first hour of trade on Thursday, following falls on Wall Street in the U.S.

But the supermarket giants have done well with Coles up 1 per cent in early trade to $18.02 as Woolworths rose 2.4 per cent to $36.52. 

Department store chain Myer’s share price has climbed by 37 per cent during the past year to a still-low 42 cents, showing there are still bargains in retail stocks. 

Pape, better known as the Barefoot Investor, has told a reader to be more worried about inflation than geopolitical turmoil (pictured is Russian President Vladimir Putin with soldiers in February 2022)