Where Is The Next Major Risk Coming From?
After disruption to the economy that this pandemic has brought, we all just want to be ready for any future event. We can all feel the sense of dread in the air and severe anxiety hands in the balance. The pain and suffering that our businesses and assets have had to go through should not be something that we go through again, lightly.
So, risk management in all forms is something that we have to get to grips with. Risk is often thought of as a dark art, cloak and dagger, smoke and mirrors type of profession. But actually, it’s one of the most important professions in the world and yet, it is in our everyday life.
The US dollar weakens
Generally speaking, the US dollar has been on a downward path since 2018. The Trump administration very vocally wanted to have a weak dollar. This would help US exports and this, in turn, would help to bring back the competitiveness of the US in some ways.
However, the long-term damage of the currency was always going to bring in a new wave of risk. Right now, the GBP (perhaps the strongest currency that matters, against the USD) is now back at pre-Brexit levels. It’s now at $1.39 and that can only mean that people see risk is stagnant in the US dollar (i.e. the US economy), while a large economy like the UK is better for investors. The vaccine rollout plan of the UK is the best in the world, so far.
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Climate change impact
Green policy is high up on the Biden agenda. This will have a huge impact on industries such as commodities and raw materials. The XL pipeline is being shut down, which means, Canadian crude oil is no longer going to be imported into the US.
This could also mean that US crude manufacturers could get a break and the nation may just feed all the crude it needs, to itself. But don’t be so sure! Biden wants to limit fossil fuels, so it looks like battery production and greener energy such as windmills, nuclear, and more biomass plants.
Solar power is a big policy area that you can expect to become Biden’s home ground. So start investing in green energy companies, buy their stock, become a stakeholder and sit back and listen to the policies affirming your position, rolk in.
At-risk assets
The assets that are most at risk are the high-rise buildings and the T-bills that so many foreign investors are holding onto. With more QE on the horizon and remote working becoming the norm, click here to find out how working with a risk management firm is by far the most prudent choice you can make now.
If you have at-risk assets and you don’t know how to manage them right now, prevent losses and try to get out of them if you can, work with the pros that know about risk. They’ll give you a report that is well-researched so you can make the right choices.
There are major risks as well as major opportunities in the near future. We all hope to avoid anything catastrophic but also, invest in the companies with the brightest futures. We recommend you start now!
Consult with a financial advisor regarding these important issues.
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Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) https://www.accountingaccidentally.com/