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