Global Matters Weekly – 14 September 2020

by Richard Stutley, CFA

Realpolitik is the art of designing policy based on practical rather than ideological considerations: what works, not what we think should work. Pragmatism is an important part of investing and tells us that positioning too aggressively around political events like Brexit and the US election is risky, because both the result and the market outcomes are difficult to predict. Given a low probability of correctly predicting either, we need to see evidence of significant mispricing in order to introduce large positions in our portfolios.

Market Snapshot

  • A mixed week for global equity markets which returned -1.3%
  • Vaccine trials resume after last week’s pause
  • Brent crude fell -6.6% ending the week at $39.8 a barrel
  • Gold rose 0.3% to end the week at $1940.5 an ounce