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Macro Insight: Geopolitics and investment markets

Historically, most geopolitical events have short-lived effects on markets. Risk stems from the damage to the economic scenario, and policy response.
02 March 2022
    Download the full reportPDF, 808.18KB

    Key takeaways:

    • History tells us that most geopolitical events have short-lived effects on markets
    • Our event-study analysis corroborates that idea. But the risk comes from how much recent events have damaged the economic scenario, and how policy makers will, or can, respond
    • Recent events mean that the “stagflation tone” to economic data is set to persist for longer
    • A defensive stance to asset allocation is, therefore, prudent but we need to stay invested and take a granular approach by leveraging different regional, style, and inflation-hedging exposures to build a robust portfolio allocation