The paper and Webcast examine the effects of economic volatility and was designed to help advisers and investors navigate the global market. The paper was written by Lisa Shalett, chief investment officer and head of Investment Management and Guidance for Merrill Lynch Wealth Management, and Ian Bremmer, president of Eurasia Group.
“The Great Global Shift: New World, New Rules” explores new investment approaches in light of the changing global economy. Signaling instability, developed countries are turning inward to fix infrastructure and financial problems; at the same time, emerging-market nations are showing promise for continued growth, but many are not yet offering solutions for global economic issues, the authors contend.
Therefore, Shalett and Bremmer advocate that investors give at least as much thought to risk management as efforts to maximize returns. Managing risk in this environment requires investors to be flexible, dynamic, and global-minded and adapt portfolios to meet emerging challenges and opportunities, they say.
“People have to face the market head on and understand how to seize opportunity in this new world as it evolves,” said Shalett. “That means considering the economic, social, and political dynamics in play. The greatest risk to failing to meet financial goals stems from investors using a ‘stay the course’ approach to their portfolios.”
In August, 54% of Americans rated current economic conditions as poor, up from 42% in July, according to a Gallup poll sited in the paper. The decline in confidence due to the current volatility in the markets and the growing global financial crisis has investors clinging to their familiar tactic: buying and then “holding on for dear life.”
“Eighty percent of Americans believe the economy is getting worse, which is understandable in this turbulent global environment,” said Bremmer. “But despite much of the geopolitical uncertainty and the economic rebalancing happening in Europe, the United States, China, and elsewhere, there are ways to find success and growth even as the unpredictable occurs.”
In addition to the white paper and Webcast, Merrill Lynch Wealth Management is offering support tools to financial advisers and plans to hold events with clients.
To read the white paper and view the Webcast, visit The Great Global Shift: New World, New Rules.