Is the greatest threat to economic prosperity the ill-conceived action of a politician? Perhaps, but an intimate relationship between politics and economics has certainly endured throughout history.
The effects of political policy on economic performance can be seen as far back as ancient Rome: an economic powerhouse destroyed by political hubris and the pursuit of hegemony. The question investors must ask is: how can they protect themselves from the ire in financial markets when politics is at play, and more importantly, can they profit from such events? Political events causing market turbulence is an interminable fact of life. Fortunately, we believe that investors have two very effective tools to face political risks: geographic diversification and currency management. The probl...
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