Forbes: Globalization vs Nationalism Forces Investor Rethink

Investors worldwide are assessing the forces of globalization including trade and immigration versus nationalism, protectionism and populism. Inequality, declining worldwide, is rising in the United States, and “investors that benefit from globalization are leaving the middle and working class in the dust,” notes Kenneth Rapoza for Forbes. Those left behind clamor for limits on international cooperation with proposals like Brexit and US tariffs. Investing is unsettling and volatile with disruptions to longstanding policies and new policies announced over social media with few alternatives in place. A report from PGIM, a global investment management arm of Prudential, points to tensions between globalization and localization: top-down country-level factors accounting for 20 percent of global equity returns, global decisions impacting domestic investments, local economic growth having minimal influence over regional stock index performance, and developed markets presenting increased risk. Developed nations strive to prevent tax evasion, and emerging economies pose new competition. “Globalization has helped poor countries move out of dollar-a-day Happy Meal toy-making economies to real members of the global supply chain,” writes Rapoza. Governments, competing for jobs, seek to maintain control, and that could reduce efficiency. Some multinationals won’t go along, and investors will discover which succed. – YaleGlobal