The Responsible Capitalist
  • Blog
  • The Café
  • About
  • Contact
Menu
In search of a new form of capitalism

The Cost of Populism

6/3/2017

0 Comments

 
Picture
​The potential rise of the populist movement in developed economies will create clear and lasting costs for investors. As well as the social and political consequences, there are also risks to investment returns.
The tide of populism will bring with it a profound shift in the political and economic environments, which will have far-reaching implications for investors, both potentially positive and negative.
The focus on fiscal, rather than monetary, actions resulting from the populist vote increases the likelihood of inflation, but also brings the threat of stagflation, an aggressive bond market correction and greater financial market volatility. Steepening yield curves, meanwhile, would provide many investors with much-needed relief as discount rates improve – as long as they can tolerate the downside pressure on bond prices.
However, if populism were to threaten the eurozone, investors could face heavy losses.
Inequality sits at the heart of populism. We have been through a period where the gains of the meagre economic growth achieved since the financial crisis have been unequally shared, with the elite getting the lion’s share. The benefits of globalisation have accrued to the top 1% of earners and emerging markets primarily, while the bottom 50% of earners have seen below-average income growth.
READ MORE in this month's Portfolio Institutional magazine.

0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Most read articles

    Picture
    ESG is about risk-adjusted returns

    Picture
    A quick cuppa with Fiona Reynolds, MD, PRI

    Picture
    The rise of passive is both good and bad news

    Picture
    A quick cuppa with Jessica Ground, Schroders Global Head of Stewardship

    Faith Ward, Environment Agency Pension Fund, Chief Responsible Investment and Risk Officer
    A quick cuppa with Faith Ward, Chief Responsible Investment and Risk Officer, Environment Agency Pension Fund

    Tweets by Responsiblecap

    Categories

    All
    Articles Published Elsewhere
    Have Your Say
    News Analysis
    Perspectives
    Spill The Beans

    Archives

    September 2018
    August 2018
    May 2018
    April 2018
    February 2018
    December 2017
    November 2017
    October 2017
    August 2017
    March 2017
    February 2017
    January 2017

    RSS Feed

      Keep in touch

    Subscribe to Newsletter
Proudly powered by Weebly
  • Blog
  • The Café
  • About
  • Contact