The arrival of a new year leads inexorably to mention a list of threats to the bag in the new period. It happens year after year, and this could not be missed. Not surprisingly, they can give you some of the keys to how the investment world can develop as of January. These scenarios that arise should not necessarily be met. Of course not, it is more, most will not occur. But others did have a very notable impact on financial markets.
To analyze this possible international scenario, Bloomberg has carried out a careful study in which some of the threats the world will face starting next year. To which will be added others of special relevance that have been forgotten through this very special report. In any case, they all have a common denominator. It is none other than their broad impact on the stock market and on other financial assets of special relevance.
Some of the scenarios are very complicated to develop, but they are in the air. Others, on the contrary, are more likely to materialize. Anyway, it will be a new and original tool you have to channel your investments during this period. Above all so that you are not caught off guard in your movements. Something that constitutes one of the worst enemies of small and medium investors. Are you really ready to know where these threats will come from?
Threats: protests in the US
One of the first scenarios that arises is that there may be a series of demonstrations against the new US president, Donald Trump. And until he could impose the curfew in major cities of one of the leading powers in the international economy. If it occurs, the effect on equity markets would be immediate. But above all in the currencies, especially to the exchange of the North American currency with the uro.
Another of the assets affected by this hypothetical scenario would be the bonds of this country. Not surprisingly, they would lose their profitability dramatically. Where many investors would look shelter in the bund (German bond) to preserve your savings with a higher return. Of course, it would be a real earthquake for investors. They would have no choice but to vary their investment strategies for this year.
Economic war between the US and China
Much more achievable based on the news that is being generated in recent weeks. It cannot be ruled out far from it. Moreover, some international analysts already consider it as one of the scenarios that will be fulfilled from now on. In this sense, it must be remembered that the new tenant of the White House has already accused the Chinese authorities of currency manipulation.
A reply by the Asian government would be represented by a sudden devaluation of the yuan. As well as a commercial war in full force and under maximum intensity. It would be reflected in all financial markets, not just those of these two countries. To the point that it could be the beginning of a major recession affecting the Chinese economy. You don't have to be a fortune teller to understand that this scenario could cause a tsunami in all the stock markets in the world. Especially the European ones, which are the most sensitive to this important economy.
Also volatility it would definitely settle in the foreign exchange market. With some oscillations in its changes rarely seen in recent years. Where speculative investors would be in perfect conditions to carry out operations according to their interests. Through very fast movements and with many risks in its application. Not suitable for investors less experienced in this kind of highly specialized operations.
New version in the missile crisis
A return to the 60s of the XNUMXth century cannot be unleashed. Regarding US policy with Cuba. In this sense, Donald Trump could be tempted to abandon Obama's policy aimed at normalizing relations with Cuba. With the possibility of a return to the relations of the Caribbean country with Russia as its main ally. As in the old times of the cold war. Even with the contribution of nuclear material. Does this situation sound a bit familiar to you?
In any case, this more than improbable situation on the international scene would be more limited as regards the repercussions on the financial markets. They will be minor and of lower intensity. To the point that they would not affect you excessively in the operations that you develop in the stock market. The most that could be achieved is a process of greater volatility in the equity markets. But a priori, little more with regard to the equities of the old continent.
War between Iran and Saudi Arabia
The strong rivalry between these two leading countries in the Persian Gulf could trigger a conflict of great magnitude in this very important part of global geostrategy. With the involvement of other countries, as in the case of Israel. In this case, the financial asset most affected would undoubtedly be the oil. With a significant rise in prices that could affect the incipient recovery in the European economy. In addition, with a foreseeable rise in fuel.
The repercussion of this war incidence would be much more important than many analysts of the financial markets expect. With the possible involvement in the war conflict of the two great world powers: the United States and Russia. Of course, it was going to affect you in the development of your investment portfolio. To the point that you would have to change some of the selected values. For example, the oil companies passed on to other proposals that would act as a refuge. Among them those from the food sector.
Russia's moment
You cannot forget the return to the first scene of the international framework of the old Russian politics. To the extent that I could lead international relations from now on. It is something that cannot be ruled out, for now. Not much less in the current circumstances. Not surprisingly, it must be remembered that one of the objectives of its international policy is based on increasing its area of influence in Eastern Europe.
The economic effects of this change on the world chessboard would not be long in coming. Because indeed, for now I would suppose that the ruble will strengthen against the dollar and euro. However, it would have limited its metastases to other assets and financial markets. As a result of this action, your positions in the equity markets will not be affected. At least as regards the medium and long term. Where your approaches could be the same as you have at the moment.
Disappearance of the European Union
This would be a very worrying scenario for your interests as a small and medium investor. You would have to change all your investment approaches. Radically and maybe even traumatic. Nothing would be the same again. In all financial markets: stock, currencies, raw materials, precious metals, etc. Could suppose heavy losses in your income statement. With no choice but to assume them in a disciplined way. Not in vain, you would not have another alternative to channel your investments.
Of course, the stock market would be affected from the beginning. With widespread and especially deep falls. In this complicated scenario, the best thing you could do is be completely liquid. Even to take advantage of business opportunities that appear from now on. But in any case, it will not be the best of the scenarios that you can wish for next year. You have many ballots to leave you many euros along the way.
Of course, these are only some of the threats that can be generated in 2016. It does not mean, far from it, that they are fulfilled. But it is something latent that is there and can exert a great influence on international markets. Its nature does not matter. Because in the end they will end up affecting yourself and your relationships with the world of money and investment. Of that, do not have the slightest doubt.
Performances you can import
To prevent your savings from being affected, you will have no choice but to adopt a series of investment actions that are aimed at preserving your capital. They will not be easy to apply, but they will still be very necessary if you want to avoid having more than one dislike from now on. They can be summarized in the following keys.
- Do not have all your savings invested, but you must maintain an important liquidity in your checking account. It will be the best way to preserve your interests in these scenarios.
- Demand preserve your monetary capital rather than promoting other more expansive objectives. Without any kind of new experiences in the financial markets. It will not be a year for these performances.
- Assume that despite everything, business opportunities they will always be present, even if the most negative scenarios contemplated in these threats to financial markets are met.
- get ready for subscribe very flexible product that can be adapted to all scenarios, both positive and negative. You will see how you improve your positions from now on.
- Demand not be too aggressive in operations that you generate in the financial markets, but on the contrary, being more conservative can have a prize this very special year that is presented.