Practical analysis for investment professionals
28 February 2014

Poll: How Important Is an Understanding of Geopolitics to Your Investment Decision-Making Process?

Posted In: Economics

In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked readers how much their understanding of geopolitics affects their investment decisions.

How important is an understanding of geopolitics to your investment decision-making process?

Poll: How important is an understanding of geopolitics to your investment decision-making process?

In a world of bewildering complexity, an understanding of the ways in which people, power, personal preferences and geography influence future trends is essential. Furthermore, a simple geopolitical framework can lead to a better understanding of the investment implications of complex world events.

For example, simply looking at a map of the world shows that Ukraine is squeezed between two global powers: Germany and Russia. One could expect Germans and Russians to have a political and economic interest in their periphery and that there would be turbulence in Ukraine periodically because of this tug-of-war of influence. Other global hot spots are also easy to identify, especially when coupled with an understanding of demographics and the news.

Impressively, geopolitics is “very important” in making investment decisions to more than 63% of 685 readers and “slightly important” to 30%. Such low-hanging predictive fruit is difficult to come by in the investment business.

Do you want to participate in future polls? Sign up for the CFA Institute Financial NewsBrief.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

About the Author(s)
Jason Voss, CFA

Jason Voss, CFA, tirelessly focuses on improving the ability of investors to better serve end clients. He is the author of the Foreword Reviews Business Book of the Year Finalist, The Intuitive Investor and the CEO of Active Investment Management (AIM) Consulting. Voss also sub-contracts for the well known firm, Focus Consulting Group. Previously, he was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund to noteworthy returns. Voss holds a BA in economics and an MBA in finance and accounting from the University of Colorado.

Ethics Statement

My statement of ethics is very simple, really: I treat others as I would like to be treated. In my opinion, all systems of ethics distill to this simple statement. If you believe I have deviated from this standard, I would love to hear from you: [email protected]

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