Due to Brexit and the commercial war between United States and China, the active management for an environment of political uncertainty is defend by the firm Allinaz GI. The risk of cyber security might reduce the value of actions is their main concern and returns are likely to be moderate over the next few course of time. A meeting was held at London investment Forum to discuss the approach of investors to the market for the state of global economy. It was clear that the global economy was functioning well but the politics and trade sectors may increasingly run the markets in uncertain ways.
By the active management of Risks and opportunities which include diversification among regions, asset class and sectors can help maintain the economy by selecting ‘winning companies’ said Dwane, global strategist of Allianz GI.
In spite of Donald Trump’s commercial policy and Brexit adding a climatic uncertainty it will be evident of who the winner will be in long term. Inequality posing the real threat to economic and social stability, growth will not be in sync with it as many other options are available for the companies to rectify their imbalances.
Since the Brexit will not be resolved in a single go and that not all sectors will be affected, the investors will look for those independent of the European Union and the companies who are better prepped for Brexit.
For the active investors the trade wars are not that bad, as the investors need to look for opportunities and buy from volatile partners from US as a result of the new bilateral agreements signed with Mexico, Canada and Germany. If China adopts a revenge strategy attitude there might be a slow emerge rate in markets which makes United States the safest place for investors.
More focus on ESG can be advantageous, the manager argues that despite the inequality becoming an increased problem and an important part of the political talks In US and Europe the wealth continues to grow. This should be taken as a warning for the investors as the inequality may lead to many social ills and crash the market causing upheaval and instability.
Next in line is the confrontation of cyber security, which is posing an equal threat to the companies as this type of risk can cause the stock price to deteriorate or damage the entire reputation. On the contrary many companies are making a very god progress in fighting against cybercrimes.
To maintain a balance in their portfolio investors are seeing the infrastructure as their investment scheme. Due to its healthy risk and return approach the investors are attracted to the alternative assets. As it also provides long term stable and potential yield, a better environment of diversified protection against inflation and thus the investment in infrastructure has quadrupled since 2008.
At the end the investors need to have an active approach for less cyclical strategies as the returns are going to be moderate in the next few years and thus they should fight with long-term investments.