Normally, the end of February is the period in which investors have the chance to digest the half-year earnings season and assess how company earnings will look going forward. The half year to December numbers were broadly ahead of expectations and positive for dividends.

But the Russia/Ukraine conflict has thrown a curve ball at corporate valuations determining share prices. The measured application of price earnings multiples has been replaced by panic.

Stocks with safer and less cyclical earnings, like healthcare and utilities are faring better than the cyclical stocks and banks shares.

The central theme emerging from Australia’s February reporting season was that the COVID hangover, supply chain constraints and rising fuel costs were fuelling inflationary pressures. We saw evidence of this across most sectors of the economy from supermarkets, discretionary retail and construction to mining and aviation.

But there are differing opinions from corporate leaders on the duration of supply chain disruptions. Some see an end to the problem by the end of the calendar year, others are less optimistic.

But all are warning that inflation is already here. And even when supply chain issues are ironed out, the inflation genie is likely to have a longer tail.

Perhaps the safer course is to revisit the adage on sharemarket returns that references the wisdom of longer-term investing - ‘time in, not timing’.

How long and how impactful inflation will be to local investors brings us back to the conflict in Ukraine.

The long list of sanctions being imposed by Western countries is testament to Russia’s high economic pain threshold. But fears that Russia’s oil and gas exports to Europe may be a casualty of the conflict is feeding into inflationary fears and in turn into central banks fighting inflation by increasing interest rates.

Markets are currently placing bets on the US Federal Reserve easing back on the previous schedule for interest rate hikes to soften the fall in equities markets.

There also comes a point where shares have become so oversold that they represent good value. Second guessing the trajectory of the European conflict is a hazardous exercise, but history has also shown us that the initial response to a crisis can fade even if the event is protracted.

The pandemic was a perfect example of this. Markets fell for only a month after COVID invaded and bounced back quickly despite the pandemic’s two-year duration and the uncertainty about whether new variants will emerge.

Perhaps the safer course is to revisit the adage on sharemarket returns that references the wisdom of longer-term investing - ‘time in, not timing’.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon