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Geopolitics and Investing: Normality of the Unexpected

Blue Paper

Geopolitics and Investing
March 2017

Key Insights

The intersection of anti-globalization, anti-multiculturalism, and security/terrorism are driving nostalgia for eras of perceived better times and national glory.

This wave of the so-called “nostalgic nationalism” has fueled a rise in populism around the world. Consequently, global geopolitical changes will continue to be a major theme for investors in 2017.

 

For investors the three main geopolitical trends to watch in 2017 are:

 

1. How the Trump presidency operates and affects the global economy.
Some of Trump’s policies are decidedly pro-growth, while others may pose serious risks to the economy. Currently, markets may be paying too much attention to Trump’s pro-growth policies while underestimating the risks of downsides.

 

2. What the rise in populism means for Europe’s economies.
Europeans are becoming more pessimistic about the future and this sentiment has fueled a rise in populism. This trend could weaken the European Union, even if a populist leader will not be elected.

 

3. Oil price dynamics.
Technological improvements are driving efficiency gains in oil production, and are likely to keep oil prices in the range of $45-60 a barrel. Oil prices are not likely to back to $80 a barrel, unless there is some global geopolitical crisis.

Global Geopolitics 2017: Risks & Opportunities for Investors

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Robert F. Wescott, President of Keybridge Research, gives his insight into some of the most pressing questions for investors. Trump, geopolitical risks and the rise of populism across Europe are some of the major themes to watch out for in 2017 and covered in the video.
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