Understanding The Impact Of The Economy On Your Investments
Summary
TLDRDieses Video erklärt, wie wirtschaftliche Faktoren wie Wachstum, Rezession, Zinssätze, Inflation und globale Ereignisse die Renditen von Aktien, Anleihen und Gold beeinflussen. Es betont die Bedeutung der Diversifikation in einem Portfolio, um sowohl auf positive als auch negative wirtschaftliche Nachrichten reagieren zu können. Des Weiteren wird ein besonderer Fokus auf Datenschutz durch die App Incog gelegt, die dabei hilft, die Kontrolle über persönliche Daten zurückzugewinnen.
Takeaways
- 📈 Wachstum und Aktienpreise: Eine stärkere Wirtschaftsentwicklung führt nicht unbedingt zu höheren Aktienkursen, da mehr Kapital- und Arbeitseinsatz oft nicht den Unternehmen zugutekommt.
- 📉 Aktien und Wachstum: Aktien sind voraussichtlich und können in Rezessionen zukünftiges Wachstum antizipieren, während Wirtschaftsdaten noch schlecht aussehen.
- 💹 Aktienpreise und Ausgaben: Ein stärkeres Wachstum kann zu einer Ausgabe von mehr Aktien führen, was die Gewinne pro Aktie dilutiert und die Aktienpreise beeinträchtigt.
- 🌐 Wachstum und Unternehmen: Wachstum wird oft von neuen Unternehmen getrieben, die in Aktienindizes oft nicht repräsentiert sind, was den Zusammenhang zwischen Wachstum und Aktienpreisen schwächt.
- 📉 Rezessionen und Anlagemöglichkeiten: In Zeiten von Rezessionen können niedrigere Aktienbewertungen als 'Verkaufs'-Chancen angesehen werden, um langfristig höhere Renditen zu erzielen.
- 🔗 Anleihenrenditen und Wachstum: Es gibt eine langfristige Beziehung zwischen den Zinsen für Staatsanleihen und dem nominalen Wachstum eines Landes.
- 🔄 Anleihen und diversifizierte Anlage: Anleihen und Aktien reagieren auf Wirtschaftsnachrichten unterschiedlich, was zu einer guten Diversifikation beider Anlageformen führt.
- 🌪️ Inflation und Anlagegüter: Ein geringerer Inflationsgrad kann von Aktien problemlos absorbiert werden, aber eine Inflation über 5% kann zu einer Wertminderung von Aktien führen.
- 🏦 Zinssätze und Sektoren: Höhere Zinssätze beeinträchtigen unterschiedliche Branchen unterschiedlich, wobei Finanzen von ihnen profitieren können, während Immobilien und Infrastrukturunternehmen sowie Wachstumsaktien unter ihnen leiden.
- 📊 Gold und Zinssätze: Gold hat in der Regel ein negatives Verhältnis zu den Zinssätzen, da es keine Einnahmen erzeugt und bei steigenden Zinssätzen weniger attraktiv wird.
- 🌐 Globale Wirtschaftsereignisse: Unvorhersehbare globale Ereignisse wie Krisen oder Kriege können den Handel beeinträchtigen und zu einer Zunahme von Handelshemmnissen führen, was die globale Wirtschaft beeinträchtigen kann.
Q & A
Wie wirkt sich wirtschaftliches Wachstum auf den Aktienmarkt aus?
-Umgekehrt zu den Erwartungen könnten stärkeres wirtschaftliches Wachstum aufgrund von erhöhten Kapital- und Arbeitseinsätzen zu weniger Aktienmarktwachstum führen, da diese Eingaben den Unternehmen in einem Land nicht unbedingt zugutekommen.
Was zeigt die Beziehung zwischen dem Bruttoinlandsprodukt (BIP) und Aktienrenditen über einen längeren Zeitraum hinweg?
-Über einen Zeitraum von einem Jahrhundert hinweg beobachtet, zeigt die Beziehung zwischen dem BIP-Wachstum pro Kopf und den Aktienrenditen in verschiedenen Ländern eine negative Korrelation.
Wie wirkt sich das Wachstum von Aktien auf die Aktionärsrechte aus?
-Starkes Wachstum kann zu einer Zunahme der ausgegebenen Aktien führen, was die Gewinne und Gewinne pro Aktie aufdampfen kann, da der Anteil des Aktionärs an den gesamten Reichtümern des Unternehmens abnimmt.
Was ist der Effekt von Inflation auf Aktien?
-Ein geringer bis mäßiger Inflationsgrad kann von Aktien problemlos absorbiert werden, da Unternehmen ihre Preise erhöhen können. Bei Inflationsraten über 5% kann dies jedoch zu fallenden Gewinnen und Margen führen, was die Aktienbewertung verringert.
Wie hängt der Zinssatz für Staatsanleihen mit dem nominalen BIP-Wachstum zusammen?
-Es gibt eine langfristige Beziehung zwischen dem Zinssatz für Staatsanleihen und dem nominalen BIP-Wachstum in einem Land, wobei ein höheres BIP-Wachstum zu höheren Anleihenzinsen führen kann.
Was ist der Unterschied zwischen dem Einfluss von Wirtschaftsfaktoren auf Aktien und Anleihen?
-Akteure und Anleihen reagieren auf Wirtschaftsnachrichten oft unterschiedlich, was dazu führt, dass sie sich im Allgemeinen gut diversifizieren und Risiken ausgleichen können.
Wie wirkt sich eine Rezession auf die Anlagestrategie aus?
-Eine Diversifikation der Anlageportfolios, einschließlich Aktien, Anleihen und Gold, kann helfen, den Auswirkungen einer Rezession entgegenzuwirken und sicherzustellen, dass einige Anlageformen auch in schwierigen Zeiten gut abschneiden.
Was ist der 'Golden Butterfly' Portfolio und wie wirkt es sich auf die Rendite aus?
-Das 'Golden Butterfly' Portfolio ist eine Anlagestrategie, die ein Fünftel des Portfolios in fünf verschiedene Vermögensgegenstände teilt, was zu weniger volatilen 10-Jahres-Renditen führt und verhindert, dass ein gesamter Jahrzehnt verloren geht.
Wie beeinflussen globale Wirtschaftsereignisse die Märkte?
-Globale Wirtschaftsereignisse, wie Krisen oder Kriege, können den Handel beeinträchtigen, da sie Furcht verursachen und zu einer Verkäufe von Aktien und einem Kauf von sicheren Vermögenswerten führen.
Was ist der Einfluss von Zinsänderungen auf Gold?
-Gold hat in der Regel einen negativen Zusammenhang mit den Zinsen, da es keine Einnahmen erzeugt und bei steigenden Zinsen, die höhere Einkommen bringen, weniger attraktiv wird.
Was bedeuten protektionistische Maßnahmen für die globale Wirtschaft?
-Protektionismus, wie Zölle auf Importe, kann den Handel einschränken und zu einer Verschlechterung der globalen Wirtschaft führen, insbesondere wenn es zu Gegenmaßnahmen und einer Eskalation kommt.
Outlines
📈 Wachstum und Aktienmarktbeziehung
Dieses Absatz beschäftigt sich mit der unerwarteten Beziehung zwischen Wirtschaftswachstum und Aktienmarktrenditen. Es wird erklärt, dass ein stärkeres pro-Kopf-BIP-Wachstum nicht unbedingt höhere Aktienmarktrenditen bedeutet. Stattdessen zeigt eine langfristige Analyse eine negative Korrelation zwischen den beiden. Der Autor weist darauf hin, dass wirtschaftliches Wachstum oft durch erhöhte Kapital- und Arbeitseinsätze erreicht wird, was Unternehmen nicht unbedingt vorteilhaft ist. Des Weiteren wird die Tendenz, dass bei starkem Wachstum mehr Aktien emittiert werden, was zu einer Verdünnen der Gewinne pro Aktie führt. Auch der internationale Charakter der Unternehmensgewinne wird hervorgehoben, da BIP ein inländischer Indikator ist. Schließlich wird die sogenannte Euphorie-Effekt diskutiert, bei dem bei starkem Wachstum die Aktienpreise überbewertet werden können, was zu einem anschließenden Marktrückgang führen kann.
📉 Effekt von Wirtschaftswachstum auf Anleihenrenditen
In diesem Absatz wird die Beziehung zwischen nominalem BIP-Wachstum und Anleihenrenditen erläutert. Es wird eine langfristige Übereinstimmung zwischen den beiden in den USA dargestellt, wobei eine Abnahme des BIP-Wachstums zu steigenden Anleihenrenditen führt. Es wird betont, dass Anleihen auf schlechte Wirtschaftsnachrichten reagieren, indem sie Renditen senken und Anleihenpreise erhöhen. Der Absatz unterstreicht, dass Anleihen und Aktien unterschiedlich auf Wirtschaftsnachrichten reagieren und daher in der Regel ein gutes Risiko-Absicherungsinstrument füreinander sind. Allerdings werden Ausnahmen diskutiert, insbesondere in Zeiten starken Inflation oder Deflations, die sowohl für Aktien als auch für Anleihen schädlich sein können.
🏦 Inflation und ihre Auswirkungen auf verschiedene Anlageformen
Dieser Absatz behandelt die Auswirkungen von Inflation auf Aktien, Anleihen und Gold. Es wird eine historische Datenreihe seit 1871 in den USA präsentiert, die zeigt, dass alle drei Anlageformen Inflation übertroffen haben. Es wird jedoch darauf hingewiesen, dass es ratsam ist, eine Diversifikation vorzunehmen, da es nicht immer garantiert ist, dass Aktien die Inflation überwinden können. Bei sehr hohen Inflationssätzen kann der Aktienmarkt einbrechen, während Anleihen und Gold in solchen Zeiten bessere Performer sein können. Außerdem wird die Tendenz, dass Anleihen in Zeiten von Deflation besser abschneiden, diskutiert, da fallende Preise ein Zeichen einer kranken Wirtschaft sind.
📊 Zinssätze und ihre Auswirkungen auf Aktien, Anleihen und Gold
In diesem Absatz werden die Auswirkungen von Zinssätzen auf verschiedene Anlageformen analysiert. Es wird erklärt, dass der Einfluss von höheren Zinssätzen vom Sektor abhängt, in dem die Aktie tätig ist. Finanzdienstleistungen könnten von höheren Zinssätzen profitieren, während Sektoren wie Immobilien, Versorger und Wachstumsaktien eine negative Auswirkung erfahren könnten. Für Anleihen wird eine subtilere Wirkung beschrieben, bei der steigende Zinssätze zu fallenden Anleihenpreisen führen, aber langfristig durch neue Anleihen mit höheren Coupons den Einkommenswert erhöhen können. Für Gold wird eine allgemeine negative Beziehung zu Zinssätzen beschrieben, da Gold kein Einkommen generiert und in Zeiten steigender Zinssätze weniger attraktiv wird.
🌐 Globale Wirtschaftsereignisse und ihre Auswirkungen auf Anlagen
Dieser Absatz diskutiert die Auswirkungen globaler Wirtschaftsereignisse auf die Anlageperformance. Es wird betont, dass Furcht durch Krisen zu einem Verkauf von Aktien und einem Kauf von sicheren Vermögenswerten wie US-Treasury-Anleihen, UK-Gilts und Gold führen kann. Es wird auch die Bedeutung von Handelsrichtlinien und geopolitischer Stabilität für die globale Wirtschaft hervorgehoben. Handelskriege und geopolitische Instabilität können zu wirtschaftlichen Problemen führen, insbesondere wenn Länder, die zusammenhandeln, in Konflikt geraten. Eine Diversifikation der Anlageportfolios wird als Mittel zur Absicherung vor diesen unvorhersehbaren Ereignissen empfohlen.
Mindmap
Keywords
💡Wirtschaftswachstum
💡Rücksichtslosen
💡Bonds
💡Inflation
💡Zinssätze
💡Gold
💡Diversifikation
💡Rezession
💡Globale Ereignisse
💡Schutzbrief
Highlights
Economic growth and stock market performance often show a negative correlation historically.
Increased economic growth can lead to more capital and labor inputs, potentially not benefiting companies directly.
Stocks are forward-looking, whereas GDP is a backward-looking measure, causing a discrepancy in their relationship.
Strong GDP growth can lead to more shares being issued, diluting profits per share and affecting stock prices.
GDP growth is domestic, while company profits are often international, especially for large exporting companies.
Entrepreneurial spirit drives GDP growth but may not be reflected in stock indices focused on established companies.
Euphoria during strong GDP growth can lead to overvaluation of stocks and subsequent underperformance.
Contrarian investment approach can be beneficial during recessions, as stocks may be undervalued.
There's a long-term relationship between bond yields and nominal GDP growth.
Bonds and stocks are driven by different economic factors, leading to a diversification benefit.
Incog app helps users regain control over their data privacy by suppressing data broker access.
Diversification with assets like stocks, bonds, and gold can mitigate risks during recessions.
Inflation's impact on investments varies; stocks, bonds, and gold have historically beaten inflation.
High inflation or deflation can negatively affect stock valuations and bond prices.
Interest rates influence different sectors of the stock market in varying ways.
Bonds are affected by interest rate changes, with new issues compensating for initial price drops.
Gold typically has a negative relationship with interest rates due to its lack of income generation.
Global economic events, such as crises, can lead to market fear and affect investment choices.
Trade wars and protectionism can disrupt international trade and impact the global economy.
Geopolitical instability can affect commodity prices and pose risks to the global economy.
Diversification is key to managing risks in an unpredictable economic environment.
Transcripts
there's a wealth of global economic data
but as investors it's difficult to
understand how the economy affects our
investments in this video I describe the
effect of growth recession interest
rates inflation and also Global events
on stocks bonds and gold this should
help you to navigate the investment
landscape with a better understanding of
the economic fundamentals this video is
sponsored by incog an app that helps you
take back control of your data privacy
let's begin by looking at economic
growth and how it affects the stock
market naively you might expect that if
economic growth is strong it creates
strong demand for goods and services
that pushes up profits at companies
which in turn drives up their stock
prices well in fact what we observe is
the exact opposite so if we plot GDP
growth per capita for various countries
over a long period of time and this is
over A Century of data that you can see
here
and we plot that versus return on stocks
in that country we actually observe a
negative correlation in other words more
per capita GDP growth means less growth
in the stock market the author of the
paper Ritter points out that the
increased economic growth comes from
increased inputs of capital and labor
and that doesn't necessarily benefit the
companies in a country so that was
comparing between countries over a long
period of time what if we were to look
overtime for a particular country and
look at the relationship between GDP
growth and the increase in stock prices
well here again the relationship is not
what you'd expect because GDP is
fundamentally a backward-looking measure
whereas stocks tend to be
forward-looking for example if you buy
at the worst point in a recession stocks
will already be looking through the
darkness to the light of future recovery
whereas economic data will still look
very poor indeed but beyond this obvious
lag effect there's another point which
is to do with slippage and this was from
a paper by Bernstein and arnut where
they point out that if there is strong
GDP growth what tends to happen is that
more shares are issued and that means if
you look at the profits per share
earnings per share then that actually
gets diluted overall for an entire
market so while overall there's greater
riches in the economy you don't
necessarily share in those riches
because of this dilution of your
ownership another point is that GDP is a
domestic measure whereas profits for
companies tend to be International
particularly if it's dominated by some
exporting large caps so that also
weakens the link between domestic GDP
growth and the profits and share price
growth of stocks another point is that
GDP growth is strongly driven by new
companies this is the kind of
entrepreneur IAL Spirit of the country
so while that does Drive GDP growth you
won't necessarily get exposure to it if
you buy that country stock index
remember that that will be heavily
weighted towards the older more
established and successful companies in
the country and then finally there's
also the effect of euphoria that you get
when GDP growth is strong for example
people tend to overpay for stocks when
that's the case for example if you look
at the incredible GDP growth in Japan in
the 70s and ' 80s that led to a huge
bout of euphoria and it led people to
overpay massively for Japanese stocks
and then inevitably there was the bust
that followed and stocks underperformed
as a result so if anything the way you
should be thinking is as someone who's a
contrarian if you do see that there's a
recession and that pushes down the
valuations of stocks look at that as a
sale an opportunity be forward looking
and expect things to improve it's
difficult to do it at the time because
all you'll hear is bad news but that way
you can generate higher returns longterm
now let's turn to the effect of economic
growth on bonds and bond yields now
there's a long-term relationship between
the yield on bonds government bonds this
is and the ninal GDP growth in a country
so that's not adjusted for inflation so
for example if you look at us 10-year
yields going back to 1960 notice how
they tend to track roughly what happens
to GDP growth nominal GDP growth in the
United States now after 2020 when we
switched the economy off and switched it
back on again the level of GDP went
deeply negative then strongly positive
and now what's happened is that it's
Fallen back down to a sane level of
growth but notice what's happened to
10-year yields they're rising up to meet
falling GDP so the situation we find
ourselves in now and in the scatter plot
the Red Dot is where we are as I make
this video you can see that the two are
roughly in line with each other nominal
GDP growth would suggest a yield for
10-year bonds of around 4.3 to
5.5% and the actual yield is 4.6
implicitly what this relationship means
is that bonds feed on bad economic news
so if growth is expected to be low that
pushes down yields and it pushes up bond
prices but the key Point here is that
what drives bonds and stocks are
different economic factors they tend to
respond in different ways to good and
bad economic news and this is why stocks
and bonds tend to diversify one another
quite well most of the time although we
will see an exception in a moment
today's video is sponsored by incog now
you may not be aware but third parties
can actually buy your data and they're
allowed to do that it is legal and that
data would include things like your name
your date of birth your address any
email addresses you've got phone numbers
even your relatives and of course
financial information now the people who
actually trade that data legally are
called Data Brokers so let's say you
apply for some kind of financial product
the company you're applying to could buy
data about you from one of these data
Brokers and that's a legal use of the
data what you also find is that scammers
buy this data too so personally I'd much
rather that nobody could buy it at all
now what you could do is research all of
this yourself find the names of the data
broker companies contact them and ask
them to remove your data however this
would take a lot of time so what incog
does is contact all of these data
Brokers for you I first opened an
account with them in January
2024 and you can see that they've added
me to 19 suppression lists I can also
see the detailed view of what they've
done and I can rank these data Brokers
by severity so these three companies are
ranked as high severity so if we drill
into one of them you can see precisely
what the risks are identity theft spam
email and calls data leaks and so on and
you can see that in this case the
broker's being suppressed so they can't
use my data now viewers of pension craft
get a special discount from incog such
that you get 6 % off your annual plan to
claim that discount you can use our
promo code which is pension
alternatively click on the link in the
description below how about a period of
negative economic growth or a recession
well the difficulty here is that very
few of us can see these recessions
coming some people claim to be able to
but it's usually not true so what can we
do to prepare for that well one way to
prepare for it is to be Diversified if
you have assets in your portfolio like
stocks bonds but also gold that respond
in different ways to economic news then
even if there's a recession at least
some of them will be performing well so
if we have a 100% stock portfolio and we
look at every 10-year return since
1970 notice that there were periods
where an entire decade was lost these
are decades that started in the 1970s
and in the early 2000s so 100% stock
portfolio in a given country tree will
be subject to these periods of
underperformance how about if we
diversify across different types of
stocks but also different asset types
one portfolio which does fairly well
through good times and bad is called The
Golden Butterfly created by Tyler who
created the portfolio charts website
which is where this data is from this
portfolio is called The Golden Butterfly
because if you plot the pie chart of its
allocation it looks a little bit like a
butterfly but notice how it's very very
simple it simply allocates a fifth of
your portfolio to five different things
the total stock market small cap stocks
long-term bonds short-term bonds and
gold and now what we see is that the
returns tend to be less volatile for
these 10-year periods there is no
10-year period when the return was
deeply negative so while the highs
aren't as high as they would be for 100%
stocks you also don't get those really
awful decades which would put you off
investing Al together now let's turn to
inflation and see how it affects stocks
bonds and gold if we look at the period
since 1871 in the United States and I
plot the returns of stocks the S&P 500
but also 10-year treasuries and gold and
have also shown inflation over this
period all three of those Investments
beat inflation and if we look at the
increasing rates of return gold has the
lowest return then we get us 10-year
bonds and then we get stocks with
respective returns of 3.2% per year for
gold 4.6% per year for treasuries and a
very respectable 99.1% per year for
stocks so certainly if you want to beat
inflation long term stocks have been the
way to do it historically however it's
unlikely that we're going to live long
enough to see these long-term trends in
some cases so this is why it's not a bad
idea to have some
diversification because it's not always
the case that stocks can beat inflation
if we plot the valuation of stocks this
is using Robert Schiller's Cape measure
versus the rate of inflation on the
x-axis we get this kind of peaked shape
where the highest valuations are for a
rate of inflation of around 2% to 3% but
notice what happens if inflation really
increases a lot what we get is dting the
valuation multiple of stocks Falls as
people lose confidence in stocks to a
certain extent stocks can weather
inflation because what companies can do
is simply raise their prices to match
price increases but at a certain point
customers will not be willing to pay
ever higher prices and this means that
profits fall and margins fall and stocks
derate so a small amount of inflation
can be easily absorbed by stocks but
once it gets too high Beyond about 5%
then it becomes a problem similarly in
deflation when prices are falling year
over-year that usually is a symptom of a
sick economy with very little demand for
goods and services and again what
happens here is at stocks D rate so here
what we'd expect to do well in a period
of deflation would be government bonds
now what we saw recently in 2022 was
that inflation surged and at the same
time stocks and bonds fell
simultaneously in other words this
hedging Rel relationship where bonds
tend to cushion losses in stocks broke
down completely as both fell together
and historically we've been here before
we saw it in the
1970s you can see in this data here from
schroers that when inflation is high the
correlation between stocks and bonds
increases and that's because as we saw
High inflation is toxic for stocks they
derate and because with bonds you're
locky in a fixed rate of interest a high
inflation rate is like Kryptonite for
bonds as well so in a period of really
high inflation gold here may be useful
in your portfolio another asset which
holds up surprisingly well would be
things like money market funds which
although they're quite boring don't
necessarily lose a lot of value and
that's because they're not lock you in a
fixed rate of interest for a long period
of time they've got very short duration
so here again depending on the inflation
regime that we find ourselves in and
remember it's not predictable then
diversification helps us because
different assets respond to inflation in
different ways now let's turn to the
effect of interest rates on those three
assets stocks bonds and gold starting
off with stocks the effect of higher
interest rates depends on the sector
that the stock is in different
Industries will be differently impacted
by higher rates of Interest financials
which make some of their profits from
lending actually may benefit from higher
interest rates whereas other sectors
that require borrowing in order to boost
their returns and the classic example is
real estate would be negatively impacted
by higher interest rates and a higher
cost of funding utilities companies also
tend to be heavily reliant on low cost
of funding to fund their infrastructure
and growth stocks also rely on cheap
funding to grow their revenue so all
three of those sectors would be
negatively impacted in contrast sectors
like Health Care communication services
and consumer staples are much less
heavily dependent on funding and would
probably hold up much better if interest
rates do increase if we turn to bonds
the effect here is slightly more subtle
because what you'd expect to happen is
if interest rates increase then by
definition yields will be increasing and
prices would fall that effect would be
immediate so if you've got a bond in
your portfolio already or a bond fund
the price of that fund would fall
straight away and the longer the
duration of your fund or your bond the
more the price would fall but then what
happens is more nuanced and takes longer
but because newly issued bonds will have
a higher rate of interest baked in that
increases your income as yields rise so
the initial shock is bad it pushes the
price of your fund down but the longer
term effect is a positive one which is
that newly issued bonds enter your
portfolio and push up your income you
can see that in the case of this fund
which is issued by Vanguard it's vov
it's a guilt fund it buys UK government
bonds notice how in 2022 its price
tanked as yields shot up but then what
we see slowly over time is if you look
at the dividend payments which are
monthly for this fund they gradually
increased over time as new Bonds were
bought by the fund with higher coupons
in the case of gold It generally has a
negative relationship with interest
rates because it doesn't generate an
income itself and if you can buy
treasuries which do generate an income a
higher income when rates increase then
it'll become less attractive as an
investment particularly as it's quite
volatile whereas bonds tend not to be if
they're fairly short duration in
pensioncraft we've got a fair value
model for gold which we give to our
members and this is available on our
website but this has three drivers one
of them is the level of inflation
because as we saw gold does tend to
track inflation long term but the other
factors would be the value of the dollar
the trade weighted dollar because the
price of gold is measured in dollars and
a weak dollar pushes up the price of
gold and the model also includes real
yield so when yields are high that tends
to push down the price of gold so here
is that model right now and you can see
that the price of gold is overvalued by
about 14% as I make the video and if you
want to have access to this and other
tools that come with our premium website
membership just go to our website
pensioncraft tocom finally let's
consider global economic events now some
events create fear and this would be
some kind of Crisis it could be a war
and these are fundamentally
unpredictable and these affect markets
because when people are scared they tend
to sell their stocks and buy safe things
which in this case would be things like
us treasuries UK guilts and other
developed Market government bonds but
also people tend to flee to things like
money market funds and gold if there is
a severe economic event such as a
pandemic then it affects things like
demand for goods and services but also
things like International Trade now the
biggest players in international trade
are primarily three countries no
surprises that China's top of the list
but the US and Germany are also
considerably higher than the rest of the
world when it comes to the value of
their exports so Chinese exports in 2022
were about $4 trillion the US was about
$3 trillion and Germany was about 2
trillion then the next highest Falls all
the way down to 1 trillion and that's
the UK which exports a lot of services
but it's when this trade breaks down
that you get real problems and what
we've seen recently is a lot more talk
of protectionism where a country puts
tariffs onto its Imports in order to
protect its domestic producers now if we
look back in time tariffs were much more
common in the past than they are now
both in terms of size but also the
number of countries which imposed them
here you can see data for France the UK
and the US and all three of them had
very high tariffs for a very long period
of time notice how following the Great
Depression tariffs fell out of favor
many people pointed the finger at
tariffs for worsening that huge economic
depression which was Global in scale
then we had organizations like the World
Trade Organization which was designed to
allow free trade and to create a kind of
Level Playing Field but the narrative
has changed noticeably recently because
there's a growing feeling in developed
countries that China is abusing its role
as an exporter by subsidizing its
companies and subsequently under cutting
price in developed markets particularly
for high value added and technological
Industries for things like electric cars
but also electronics and this is why
first the Trump Administration now the
Biden Administration have hugely
increased tariffs on imports from China
in May of 2024 for example tariffs on
things like electric vehicles from China
were increased to 100% by Biden now
there are hardly any Electric Car
Imports to the US anyway so this is more
of a preventative measure to allow the
US Electric Vehicle industry to really
get off the ground and this is because
China has pretty much beaten them to
that game but also other key Industries
things like semiconductors but also
solar cells have also had these tariffs
imposed now the problem is that if you
go back in time to the 1930s say if you
look at something called the smooth hly
tariff initially it actually made things
look better it had the desired effect
which was to slow down Imports and favor
domestic producers of things like
agricultural Goods however What followed
was retaliation from other countries and
those were very severe such that the
US's exports also were cut so the
consequence was that a world that was
already scarred by the Great Depression
fell into an Ever greater slump
hopefully that won't happen this time
because these tariffs are very surgical
they're very focused in certain sectors
but who knows if it does escalate then I
suspect the impact will be negative but
if we go back to that beg of Thy
Neighbor type of tit fortat response
then we could all be poorer as a result
another problem is geopolitical
instability because if trade does break
down countries which trade together tend
not to go to war against each other so
if there is a breakdown of trade I think
there's a greater risk of geopolitical
instability and as we saw with Russia's
invasion of Ukraine what happened as a
consequence of that breakdown of trade
and that's because countries imposed
sanctions against Russia was that energy
prices surged a lot of countries such as
Germany Hungary Poland the Czech
Republic were heavily dependent on
Russia for their supply of natural gas
so geopolitical instability particularly
from commodity producers can be a huge
problem for the global economy
unfortunately it is unpredictable but
here again diversification can help you
to some extent for example if you don't
have a 100% stock portfolio and there is
fear due to a global trade War then at
least some aspects of your portfolio
will do well and of course there's a
possibility of an allout War for example
there's a lot of worries at the moment
about what's going to happen in the
south China see and whether China May
invade Taiwan if that happens then this
could escalate into a global conflict so
again having some Safe Haven Assets in
your portfolio like gold like cash like
short-term government bonds will protect
you if that happens so I hope this video
has helped you understand how economic
factors can drive the returns in your
portfolio but also why it's important to
be Diversified because if you are then
at least some aspects of your portfolio
will be able to weather whatever the
economy throws at them now don't forget
our offer from incog you can take back
control of your data and get 60% off an
annual plan just go to the link in the
description below or use our promo code
which is pension and as always thank you
for listening
Voir Plus de Vidéos Connexes
Molare Masse und molares Volumen I musstewissen Chemie
You Will Never Watch P%RNHUB AGAIN After This Video (Pt 2)‼️
Wohin wandert der Mensch? | 42 - Die Antwort auf fast alles | ARTE
Wie deine Gedanken deinen Körper beeinflussen
Deshalb ist Gold kein sinnvolles Investment! Gerd Kommer im Interview 2/4 | Finanzfluss
J-POW JUST SEALED THE MARKET'S FATE!!
5.0 / 5 (0 votes)