Investors should not “obsess about the wave of anti-globalisation” projected by many politicians across the western world, affirms the boss of one of the world’s largest independent financial advisory organisations.
The bold, somewhat contrarian, message from Nigel Green, the founder and chief executive of deVere Group, comes after the surprise results in both the U.S. presidential elections and the UK’s referendum to leave the EU.
Mr Green comments: “Populism is an increasingly important force in global politics. Understandably, people are worrying about their jobs, their wages, and stagnating economic growth. As a result, they are seeking alternatives on the more radical left and the more radical right of the political spectrum.
“This phenomenon is evidenced by two high profiles populists – Boris Johnson who successfully led the Brexit campaign and Donald Trump, the new U.S. president-elect – having won the two key popular votes in the western world of 2016.
“Elsewhere, in Europe, Marine Le Pen, leader of the far-right National Front party, is gaining considerable ground. Could she win the presidential election on 7 May next year? She could be up against Nicolas Sarkozy. With Sarkozy often perceived as a controversial Establishment figure with a lot of baggage, this would draw inevitable parallels with the Trump vs Clinton battle.”
He continues: “Despite the increasing abundance of anti-globalisation rhetoric, the tough policy talk from the politicians may fail to materialise to the extent that many observers are expecting and/or fearing.
“Their more extreme approaches are likely give way, to some extent at least, to pragmatism and geopolitical and economic realities. After all, the world is becoming ever smaller, we’re all more interdependent, and globalisation is happening whether we like it or not.
He adds: “However, that said, there is indeed a ground swell of anger within huge swathes of the electorate in many countries and sentiments are changing. This is being reflected in what we’re seeing now across politics in the West – and, of course, politicians will jump on this with their policies.
“As such, there will be winners and losers in this new shaken-up era.
“For instance in America, should Trump hold true to his election pledges, the banking sector is likely to do well due to the lifting of regulations, mining and oil will get a boost the repeal of some environmental laws, and pharma stocks will rally should Obama’s Affordable Healthcare Act be scrapped or modified.”
Mr Green goes on to say: “Therefore, investors should not obsess about the wave of anti-globalisation. They need good fund managers who select investments that aim at the winning sectors, taking care to be diversified in their overall structures.
The deVere CEO concludes: “The changing sentiment will take time to play out, but investors who are prepared, ahead of the curve and vigilant are likely to be able to seriously build and maximise their wealth.”