Article last updated 24 July 2025.
We know that geopolitical risks, and the great uncertainty that can stem from them, are one of the biggest financial concerns that keep our clients awake at night. Our latest report Peace of Mind in a Dangerous World is an opportunity to shed what we hope will be some reassuring light on our approach to protecting your investments from these risks.
Last year’s escalation of the Ukraine war to a full-scale invasion was a reminder of how much difference hard-to-foresee geopolitical risks sometimes make to investors. The war was an important reason why even the most sophisticated forecasters grossly underestimated how much inflation would rise, how much equity markets would struggle and how bonds would suffer their worst year in decades.
It’s not possible to monitor every conceivable geopolitical risk. As investors, we pinpoint four ‘Tier 1’ risks: a China-Taiwan crisis; an escalation of the Ukraine conflict; a highly disruptive cyberattack; and direct military confrontation between Israel and Iran. We identify the ‘red flags’ that would suggest that each of these key risks might be imminent and outline how we plan to respond via adjustments to our investment portfolios.
The world has probably become more dangerous over the past few years and the future is unpredictable. But there are things we can do to prepare for the unknown. We hope that having a plan for how we identify, monitor and respond to geopolitical risks will offer you some peace of mind about your investments.
