Taking geopolitical risk into account


    Politics has always been a driving force behind investor sentiment and market behaviour. Historically, geopolitical risk has been concentrated in emerging markets and smaller countries, but recent years have seen it creep into the more developed markets. For example, during the past five years, political tensions in the eurozone have caused investors to have to learn to overcome market shifts caused by debt crises and reaction to any international affairs. Political uncertainty can lead to social unrest, as seen in Greece and Spain, while there were month-long protests in 2012.

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