Geopolitics for Investors

83 Pages Posted: 18 Mar 2015

Date Written: March 17, 2015

Abstract

Geopolitical issues have a profound effect on investment strategies and results. Investors inevitably must balance risk and reward. Geopolitics can bring both risks and opportunities, large and small, onto the investment landscape. The question is, How much time and effort can be devoted to this particular task? Prediction is nearly impossible but preparedness is attainable and desirable. Fund managers and investors need to ask whether preparedness is best achieved through scenario planning, by including geopolitics as one of many drivers of the investment strategy, or by changing the investment team or the information sources and services that the team uses. As always, markets represent diverse interests and abilities. Some investors will find a way to add geopolitics to their investment scenarios and to profit from it. Others will take comfort in knowing that they were not alone in utterly ignoring geopolitics. This monograph offers some core ideas about how to think about the subject. These ideas may prove useful as geopolitics returns to the investment landscape with increasing force.

Keywords: geopolitical, geopolitics, investing, investors, investment

JEL Classification: F00

Suggested Citation

Malmgren, Pippa, Geopolitics for Investors (March 17, 2015). CFA Institute Research Foundation M2015-1. Available at SSRN: https://ssrn.com/abstract=2580184

Pippa Malmgren (Contact Author)

DRPM Group ( email )

20 Grosvenor Place
London SW1X 7HN
United Kingdom

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