Eight geopolitical dangers looming in 2016
15 Dec 15
Geopolitical risks are inherently difficult to predict, but here are some of the key issues GAM investment experts are watching in 2016.
Higher wages and lower margins
“Income inequality has been a very topical issue for a while now, especially in Western countries. The share of income in US society taken by the higher echelons is at levels only previously seen at the end of the ‘Roaring Twenties’. However, companies in the US and across Europe are starting to raise wages. This is driven both by the shortage of suitable calibre staff, but also more generally by a change in the political wind. While that’s certainly a good thing, material increases in minimum wages could impact between one-third and one-half of all companies, according to research on the US market, and this will hit corporate profitability. Since this long bull market has been built on the idea that the historically high margins are here to stay, we think this represents considerable risk to the consensus view of the world.” – John Lambert, investment manager, global and UK equity strategies
Tags: GAM | Investment Strategy
