FT Wealth Management  

Friendshoring, nuclear buttons and a space race: what geopolitics is telling investors

  • To summarise the various factors pushing for deglobalisation
  • To be able to explain where there are pockets of growth
  • To list ways in which diversification can help shore up portfolios
CPD
Approx.40min

Indeed, as Ben Kumar of Seven Investment Management indicates: "For anyone who hasn’t seen the film, there aren’t seven gunslingers left standing by the end".

Sanctions, safety nets and savoir faire

Amid all this uncertainty, insecurity, inflation, interest rate watching and political intrigue, the expertise of specialist asset managers and wealth managers will be put to the test. 

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Trouble is, as Willy Wonka sang, "There's just no earthly way of knowing which direction we are going", and it could be that the river we're rushing down without a paddle is not actually chocolate.

Douglas says: "Untangling what makes an incredible buying opportunity for a region from what perhaps could be a period of marked decline is an art, and if any one manager could consistently succeed at it we’d all be buying that fund."

So she is looking for "reasonably-priced, high-quality businesses that have the resilience to withstand downturns and times of geopolitical stress and the capacity to grow steadily over time."

And the importance of regional diversification is more important than ever, as an insulation to the overall portfolio should one area or another become more stressed. "Diversification is the one buffer we have for uncertainty", she adds. 

Plassard echoes this. 

He says: "Every quarter I read something that says the US dollar is dead and you must have the Renminbi. But the dollar hasn't died. People said bonds were dead and they're certainly not."

Certainly, cash stuffed under the mattress and a wodge of gold is not the way forward for even the most wary saver, thanks to the eroding power of inflation.

Perhaps we should not bother investing at all, and just bunker down with bottles of water, batteries and survivalist-sized buckets of long-life macaroni cheese?

"Look, we are constructive. We may have to readapt our portfolios, but we don't think it is the end of the world", says Plassard. 

As usual, investment strategy for portfolios large and small comes down to diversification and holding on for the long-term. 

In terms of one's own feelings, Plassard's comment is about as comforting as this gets. 

simoney.kyriakou@ft.com is editor of FT Adviser

CPD
Approx.40min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to Mark Lacey, what has laid bare the risks of interconnectedness?,

  2. Douglas says what are the two US presidential candidates aligned on?

  3. If China's moves to set up bases in Mexico isn't 'friendshoring', how does Husselbee describe it?

  4. What is 'well appreciated' by markets, according to Douglas?

  5. What are more people supporting now, rather than having a global or continental outlook, according to Plassard?

  6. What does Douglas say is the one buffer for uncertainty?

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  • To summarise the various factors pushing for deglobalisation
  • To be able to explain where there are pockets of growth
  • To list ways in which diversification can help shore up portfolios

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