Over the medium to long term, geopolitics and domestic politics are not the source of market risk. To-date, investors would have been best served to ignore (i) the Trump circus, (ii) threats of a US trade war, as global trade has risen since the US election, (iii) the political calendar in Europe, (iv) political disturbances in Turkey and Brazil, and (v) ongoing uncertainty in North Korea, Syria and Iran. Most geopolitical events were overshadowed by the business cycle within weeks or months. Instead investors would be better served by focussing on issues that affect growth, profits and central bank policy. Currently, the data shows the world economy is growing, corporate profits are increasing in the US and central banks still have accommodative policies.
Continue Reading:Monthly Notes - August 2017