DigiMag Glacier_Q4_2017 - Page 21

DON’T LET GEOPOLITICS BLIND YOU TO THE INVESTMENT OPPORTUNITIES The world may appear fraught with geopolitical risk, but such perceptions cloud the vision of many investors who ignore the rich potential thrown up by the seeming disorder. A FOCUS ON QUANTITATIVE ANALYSIS HAS BLINDED asset managers to technological innovation taking place in the ‘real’ global economy. The noise makes us miss investment opportunities. Don’t be blinded – geopolitics doesn’t increase investment risk. Money always follows the path of least resistance, so don’t bet against it. The maths and data lens has distorted asset managers’ ability to detect rich pickings right under their noses. You have to open both eyes. Not everything is reflected in the data. A lack of imagination led to people missing Brexit, missing Trump, and missing the slowdown in China – and what China has done to export its sources of GDP. You cannot quantify and build models for everything – that way you wilfully become ignorant of what’s possible. The outlook for global markets is good. It sounds crazy, but $18 trillion in post- crisis spending and inflation has to go somewhere. There’s been a fundamental shift to innovation, and that needs more money. Two fundamental forces are driving the geopolitical landscape at the moment. First, US President Donald Trump’s explicit intentions to reduce the size of his central government and to devolve increased powers to the state level. This has led to a steadily shrinking US interest in affairs