Market crises: people and politics

Despite regular periods of falling prices in markets, advisers often seem to focus on the upside, with relatively little thought towards spotting the next crisis.

This is the second of two articles exploring some of the reasons why market crises can develop. The previous focus was on secular trends, while this article examines the role of people and political forces. Political developments often affect markets, as events over the past few years have shown. Although unexpected outcomes may upset mainstream opinion, media coverage rapidly moves on, and adverse market events can be quickly forgotten.