Politics and your portfolio How to protect your nest egg in times of political turmoil By now, you’ve likely seen the horrible impact of full-scale war on the citizens and refugees of Ukraine. You’ve likely read what foreign policy experts have to say about what the current war might mean for the future of Europe. And chances are that you’ve listened to market analysts and pundits try to guess what it all means for the global economy in the months and years to come. No matter how engaged (or disengaged) we may be when it comes to politics, it’s a subject that will affect our portfolios from time to time. Whether it be an unexpected reversal in tax law, an ongoing trade dispute between countries or, in the most extreme case, out-and-out war, politics can upend our carefully considered investment plans and force us to reconsider the strategies and assets which we use to accomplish our long-term life goals. Even more so if you invest at least a portion of your portfolio overseas (as you should). Trying to anticipate and plan for political changes in other countries is difficult to do for foreign policy experts − and almost impossible for casual observers such as you and me. Given the ongoing crisis in Ukraine, it seems like a good time to take a deeper look at political risk, and to try and understand how best we can mitigate it. Here’s the good news: some basic knowledge and a little common sense can go a long way toward protecting your portfolio from political risks. Let’s take a closer look at what political risk is, why it matters, and some of the practical strategies that snowbirds can implement to protect themselves (and their portfolios) from it. by James Dolan 28 | www.snowbirds.org Finance
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