• How Global Political Instability Is Affecting the Economy
• As threats of war and political instability persist throughout the world, economists and investors are losing confidence in traditional equity investments. According to a survey conducted by PineBridge Investments, 55% of pension professionals and 54% of asset management professionals named geopolitical risks as the biggest short to medium-term risk to the global economy. Major political events of the past year have led to rising uncertainty in the investment market, including rising tensions between North Korea and the U.S., the ongoing Brexit negotiations, as well as the decline of major political parties around the world. However, as 2017 comes to an end, recent developments are giving some economists and investors cause to be optimistic.

Ongoing Political Uncertainty

• While the rise of populism over the past year has led to increasing political uncertainty around the world, global markets are reaching record highs. In the U.S. under the Trump presidency, corporations are seeing record profits and low interest rates are driving investments in the U.S. and abroad. The S&P 500 is enjoying its strongest bull run since World War II, according to Business Insider. Yet, as the markets continue to rise, many economists and investors fear that the global economy is on the brink of another collapse. As Nobel-prize-winning economist Richard Thaler recently stated in The Atlantic, “The unbelievably low volatility in a time of massive global uncertainty seems mysterious to me.” Despite a rising global economy, ongoing chaos in the news has led investors to resort to safe-haven investments like gold.