Global equity markets rebounded sharply in October 2015 after the third quarter sell-off due to accommodative monetary policies and some better economic and earnings news. The gains faded late in the quarter on further weak data from China, weak exports, and more stress in the energy and commodity sectors due to oversupply mostly extracted by new technologies. As the world economies work through various transitions and uncertainty, investors are understandably anxious about the outlook for financial markets.
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The venture ecosystem in Israel is undergoing an evolution as entrepreneurs are flourishing throughout the country. In November 2015 there were 6,000 start-ups in Israel garnering funding from a new generation of venture funds made up of both spin-outs from existing firms and new VCs. The combination of a vibrant culture of entrepreneurship, support of the government, strong university, multi-national corporations, and existence of venture capital and liquidity has made many bullish on Israel.
Impact investing uses investment capital to solve social or environmental problems. Such investments often promote renewable energy, food, water, health, and economic development. While once of interest to a relative few, impact investing has gone mainstream and, according to US SIF, now accounts for more than one out of every six dollars under professional management in the United States.
Amidst headwinds such as economic weakness in China and emerging markets, financial and stock market volatility, falling oil prices and a stronger dollar, the U.S. economy weakened to end 2015. Despite these impediments to growth, several economic indicators were encouraging. During the 4th Quarter 2015, leading indices showed that consumer confidence increased, the labor market strengthened, and the unemployment rate ended at a year low at 5.0 percent.
Most market updates are preoccupied with shorter-term phenomena and near-term concerns. However, today’s realities are best assessed through a longer-term lens—one based on the goal of generating attractive, or at least sufficient, compounded returns over decades rather than months, quarters, or even years. Great investment opportunities are rare, and an investor’s job is to recognize them when they occur and to avoid putting capital in harm’s way.
The social and political volatility witnessed last year is rooted in trends and phenomena that have been building up for more than a decade. It has altered the political agenda in advanced economies and emerging markets alike. Companies need to think hard about the structural shifts that may confront them in five specific areas: security of company property, ease of doing business, viability of strategic investments, strength of corporate reputation, and cohesiveness of their workforce.
Political events in 2016 gave rise to increasing nationalism and populism globally. Combined with a global slowdown in economic and trade growth, international integration may already have plateaued and could begin to reverse over the coming decade. Multinational organizations should prepare for potentially significant implications by carefully considering the political threats in the countries in which they operate.
No matter how many times an entrepreneur has started a business, challenges abound. The marketplace is fickle in picking winners and losers, and any ego boost from other successes must be checked at the door of the new venture. But the challenges doesn’t stop many entrepreneurs from taking on multiple startup experiences. That’s increasingly true within the millennial generation, where the entrepreneurial lifestyle offers an excitement that’s hard to find elsewhere. For millennials, they know the risks, and they’re not afraid of them.
With an estimated $30 trillion plus transitioning to millennials over the next couple of decades, millennials will most certainly drive change in the financial industry. Many also see impact investing as a meaningful way to engage their capital and to achieve social and environmental impact. Ten impact investors from Europe and North America share their impact investing journeys and provide specific examples of what kind of collaboration they would value.
Unlike prior recessions and monetary responses, the attempt at economic recovery following 2008 was decidedly different. Through the Federal Reserve’s zero interest rate policy (and strong guidance that rates would stay low for an extended period of time), the Federal Reserve forced investors out of low risk assets and into risky assets. The extreme low interest rate environment created many significant, unintended consequences for both U.S. and global markets, including the impact on investor risk tolerance.