UBS: A Century of Data Shows Economic Fundamentals Are the Market's Core Driving Force

Odaily Planet Daily reports that UBS analysts pointed out in their report that data since 1900 shows that, for financial markets, economic risks have proven to be more significant than geopolitical risks. They stated that in most cases, investors who can “see through” the noise of geopolitics perform the best. The analysts said, “By performing a simple regression analysis of future global stock returns and the geopolitical threat index, we found no correlation between the two, whether looking at a one-month or one-year horizon.” However, geopolitical risks are obviously crucial during “extreme events with significant economic impact,” such as World War I, World War II, and the 1973-1974 oil crisis. But they pointed out that such events are “relatively rare,” and historically, economic risks have always been more important to investors. (Jin10)