It is fair to say that the last few years have been incredibly turbulent for global politics and the global economy. With no shortage of drama/controversy, many global events have occurred (and many are still ongoing) which are affecting markets across the world and swaying the decisions of investors.
When it comes to investment, political and economic disturbances can have a strong impact on investor behavior, and make certain markets incredibly volatile. As such, here are some of the events which investors would do well to monitor.
Undoubtedly one of the most seismic events of the last few years (possibly even decades), the vote by the UK public to leave the EU caused the pound to crash in value by 7% against the euro immediately. Given that the vast majority of trade and political partnerships come from the EU, Brexit has caused tidal waves in the investment community, especially those trading forex through a broker like Oanda.
The UK is set to leave the EU in March 2019, with negotiations over a future trade deal still ongoing. If one thing is certain in this scenario, it’s that nothing is certain, and Brexit could cause many more headaches for investors for years to come.
2 Trade Wars
Donald Trump’s presidency has been anything but tranquil, with his hard-line approach to many issues (such as immigration and trade) proving controversial. Although the US economy has actually fared quite well under his presidency, Trump continues to stoke the fires of competition and isolation with his economic policies.
This year he has started trade wars with numerous countries around the world (China, Canada), including the EU. He put tariffs on EU steel and aluminum, with the EU responding in kind with tariffs of their own. This will no doubt hurt businesses on both sides, and may well have implications for the wider global economy, meaning investors will have to be more cautious than ever.
3 Crypto Crash
Last year, bitcoin (the first and most popular cryptocurrency) was cropping up in the news on a near-daily basis as its value rocketed up, culminating in what was to be one of the biggest bubbles of recent times. In December 2017, bitcoin reached a value of nearly $20000, before crashing spectacularly (one bitcoin is worth around $6000 at time of writing).
That being said, the most popular cryptocurrencies are still worth a lot more than they were at inception. In the eyes of many investors, it could be the case that the cryptocurrency journey is just beginning, and it has already shown how quickly it can shoot up in value. As such, there is plenty of reason to keep an eye on the cryptocurrency markets.
In such a turbulent environment, many investors may well have a challenging time ahead of them as they decide where to put their money. As these events continue to develop, they may well have to adopt a more flexible, strategic approach, as it may be some time until the waters of political and economic disturbance settle.