The uneven benefits arising from political certainty: A bad political environment will hurt your portfolio, but a healthy and beneficial political situation is only a prerequisite for investing success
A lot of people in finance and the investing world love to talk about politics and the geopolitical environment. They say how important it is for there to be a stable geopolitical environment for economies to perform well. This is true, but it leaves out too many vital details - a more useful understanding can easily be obtained.
Geopolitical certainty is less a beneficial item for investing and economic success - it's more of a prerequisite for a stable economy and an attractive environment for business. Geopolitical certainty is more of a necessary condition for good things to happen, NOT a sufficient condition. This means you need political certainty and a healthy geopolitical environment for business and the economy to be strong, BUT having a great political climate won't really help your portfolio.
The reason for this uneven distribution of benefits is because stocks aren't valued based on the geopolitical landscape - they are valued based on anticipated future cash flows, discounted at appropriate discount rates. Politics can influence this a bit, but far more so in the negative direction than in the positive one.
So, don't overdo it on how much you focus on politics, the global political landscape, and how this might impact your portfolio. A better approach is to monitor for signs of a terrible geopolitical situation on the horizon while prudently picking excellent investments to put your money in.
Cities vs. Nations - Cities have been and will continue to be the true drivers of economic growth and development in the 21st Century
Nations and countries are illusions at the most basic level of reality. Cities are too, but far less so. Where the idea of a nation like the United States exists only in our minds, the idea of a big city like NYC or Los Angeles exists both in our minds and in the immediate world around us.
Cities are were life and economics happen:
Cities are where stuff happens - countries have cities and benefit from them, but can you name things that happen economically in a country but that doesn't happen in a city? Asked differently, what can you point to that's economically beneficial that, at its core, is something that happens in a country but not in a city? It's hard to think of an answer because most economically beneficial activity happens within cities themselves - nations benefit, but it's not within the nation that these things originate. Think about this another way - if you're city was run by idiot monsters who made only bad decisions, what could the national government do to fix things? The answer - not much.
When news businesses are started, when new museums and coffee shops open up, when ideas are created and implemented, or when intelligent and driven entrepreneurs drive intense economic growth in an area, it's all city-based. Cities are the economic engine of the modern world and, therefore, way more focus should be placed on cities and far less focus should be placed on nations.
If people focused as much on mayoral and city council elections as they do on Presidential races, we'd start creating better cities. A city like Detroit, for example, will never be improved because of national decisions - more granular decisions at the city level (and by people who understand local dynamics) are required. People must take city life and the responsibilities that come with being part of an urban community far more seriously in the 21st century - through that, the nation will become great on its own.
Check out a UN Habitat piece on the economic role of cities here - it's an interesting piece on how cities are the driver of economic growth globally in today's world.
And now, given the rise of cyrptocurrencies and crypto assets to quasi-mainstream financial assets, we're dedicated to providing quality, relevant, and interesting material on cryptocurrencies and cryptoassets. Articles on Bitcoin, Ethereum, Ripple, Cardano, and many more cryptocurrencies and cryptoassets can be found on Pennies and Pounds - all that in addition to a plethora of information on what cryptoassets are, how the entire crypto industry came to be, blockchain/immutable ledger technology, mining, proof of work, proof of stake, and how to prudently invest in crypto if you are so inclined (based on your risk tolerance and ability to withstand the volatility that will come with a crypto portfolio).