If you were to read, listen and watch much of the news lately, you’d think the world was going to hell in a handbasket. There are protests in the United States, political populism is surging in various parts of the world, and political and diplomatic conflict are at play in the Middle East, Russia and elsewhere.
Yet, amid all this apparent political turmoil, there has been some steady optimism in one very important global sector: the stock markets, as well as other aspects of the capital markets. So, as political uncertainly unfolds in the States a and elsewhere, those that preside over capital seem to believe that everything is just fine, at least for now.
For example, just recently, most of North America’s most prominent stock market indexes — including the S&P 500, Dow Jones, Nasdaq, and TSX — reached all-time highs. The U.S. dollar rose against all major currencies near the end of 2016. And various equity sectors finished strongly to end the year, including financials, energy, and materials.
So, what does this say about the prospects of investing? Well, it says a couple of things. First, forward-thinking investors should never get distracted by political events. A lot has happened during global history, yet financial markets often have a way of sorting themselves despite apparent political confusion.
The need for a disciplined approach
Second, with respect to investing capital, a disciplined mind makes for a prosperous portfolio. As a result, investors should never let themselves get distracted by what has increasingly become the entertainment of politics, cable news, and social media.
Instead, disciplined investors should always look for the underlying trends that truly drive capital towards lucrative opportunities, and seek fellow investors and managers that also maintain this needed discipline in the financial markets.