From trade tensions\nwith China to Britain\u2019s new Prime Minister and the potential of a hard Brexit\nthere are many geopolitical risks that are important to keep an eye on. In this\nissue of Steady Investor\u2019s Weekly, we look at the top 4 geopolitical risks and\nwhat they could mean for the global economy. Read on to get the details.<\/p>\n\n\n\n
Risk #1: U.S. \u2013 China Deadlock<\/strong><\/p>\n\n\n\n The trade dispute between the U.S. and China is well-documented\nand followed closely. This dispute is often seen by investors as a matter of\nChina needing to import more, to loosen regulations on U.S. companies operating\nthere, and to relax technology transfer rules. These matters are indeed on the\ntable. But there\u2019s more risk in this story, a big portion of which stems from\nthe fight over 5G.1<\/sup> <\/p>\n\n\n\n The nation that \u2018wins\u2019 the race to deploy 5G globally is\nlargely seen as having a long-term competitive advantage, but the U.S. also\nsees 5G as a national security issue. That\u2019s why the United States is taking\nincreasing measures to safeguard our technology and intellectual property\nfrom transfers, acquisitions and other perceived threats from China. The U.S.\nis also actively blocking some types of Chinese investment in U.S. technology\ncompanies that may allow for access to sensitive technology. On China\u2019s side,\nthey have the full support of the government in the development and deployment\nof 5G and other sensitive technologies, while development in the U.S. is run\nsolely by the private sector \u2013 putting the U.S. at a distinct disadvantage.\nChina has already committed $400 billion towards development of 5G. <\/p>\n\n\n\n The bottom line implication here is\nthat we could see a world where there are two technological spheres of influence\n\u2013 those who use China\u2019s technological infrastructure and cyber capabilities\n(restricted speech, monitoring, censorship) versus those who use the United\nStates\u2019 (free and open). In short, the current dispute is about a lot more than\njust trade. <\/p>\n\n\n\n ____________________________________________________________________________<\/strong><\/p>\n\n\n\n Download Our Dean\u2019s List of Investment Strategies!<\/a><\/strong> ____________________________________________________________________________<\/strong><\/p>\n\n\n\n Risk #2: Gulf Escalations<\/strong><\/p>\n\n\n\n Geopolitical risk in the Gulf region is somewhat of an\n\u2018ever-present\u2019 risk, though it passes through varying degrees of cool-warm-hot.\nToday, we might label the risk as warm, with the conflict in Yemen getting worse\nand with Iran\u2019s increasing military activity in the Persian Gulf. As the U.S.\nincreases its maximum sanction pressure on Iran, tensions between the two\nnations continue to bubble, and Iran is feeling the effects on its currency and\neconomy. At worst, the maximum pressure results in a buckling that amounts to\nfull-scale conflict breakout, though we see that risk as low currently. Even\nstill, as the pressure campaign continues, there is increased risk that Iran\nwill break the terms of the nuclear accord with Europe, which might result in\nsome additional escalation or response. <\/p>\n\n\n\n Risk #3: Brexit and Europe Fragmentation<\/strong><\/p>\n\n\n\n Britain just got a new Prime Minister last week in\nConservative Leader Boris Johnson, who has also staked the position as a \u201cHard\nBrexiteer.\u201d In his first speech as Prime Minister, Johnson indicated that he\nwould strike a \u201cnew deal, a better deal that will maximize the opportunities of\nBrexit.\u201d How Mr. Johnson\u2019s cabinet will do this deal, however, remains unclear\n\u2013 the European Union has indicated that the terms of the deal are\nnon-negotiable.4<\/sup> <\/p>\n\n\n\n Mr. Johnson has said that if no deal is reached by October\n31, then Britain would leave the E.U. anyway under what is known as a hard\nBrexit. The implication would be Britain leaving the E.U. with no trade or\ncustoms mechanisms in place, which could lead to bottlenecks and a potential\nrecession. <\/p>\n\n\n\n Risk #4: Deteriorating Latin America Relations<\/strong><\/p>\n\n\n\n The past couple of years have brought what we might term a\nsystemic deterioration in the relationship between the United States and Latin\nAmerican countries. The biggest culprit is the Venezuelan government, whose\nauthoritarian actions have led to the demise of the Venezuelan economy and put\nstress on other South American countries. Struggling economies in Central\nAmerican countries have also led to migration patterns that are at the center\nof the American political debate today, and the U.S. and Mexico currently have\na new trade deal that has not been ratified and whose future is uncertain.5<\/sup>\n <\/p>\n\n\n\n There is no way to know exactly where the market is headed or how these stories will pan out, but finding the right investment strategy can make a huge difference when managing the highs and lows of the market. To help you learn more about strategies that cater to different investment objectives, we have created our Dean\u2019s List of Investment Strategies.6<\/sup> This week, we focus on 4 geopolitical situations that could shape our economic future<\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-8151","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=8151"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8151\/revisions"}],"predecessor-version":[{"id":10729,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8151\/revisions\/10729"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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You can\u2019t predict how these events will affect the economy or when the next downturn will occur. But the right investment strategy can make a huge difference in preparing your long-term investments for success.
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To help you learn more about strategies that cater to different investment objectives, we have created our Dean\u2019s List of Investment Strategies.\u00a0Our Dean\u2019s List describes five of our investment strategies that are ranked in the top 9% of their respective classes according to Morningstar<\/strong>\u00a0(as of 6\/30\/19).2<\/sup>
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If you have $500,000 or more to invest and want to learn about five of our top strategies, click on the link below.
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Learn More About Our Top-Ranked Strategies!<\/a>3<\/a><\/sup><\/strong><\/p>\n\n\n\n
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Our Dean\u2019s List describes five of our investment strategies that are ranked in the top 9% of their respective classes according to Morningstar (as of 6\/30\/19).7<\/sup>\u00a0If you have $500,000 or more to invest and want to learn more about these strategies, click on the link below to see how they could potentially benefit you.<\/p>\n","protected":false},"excerpt":{"rendered":"