As protectionism grows, Credit Suisse urges investors to think about 'super trends'

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Pro-Brexit protesters demonstrate outside the Houses of Parliament on March 13, 2019 in London, England.

Dan Kitwood | Getty Images News | Getty Images

Pro-Brexit protesters demonstrate outside the Houses of Parliament on March 13, 2019 in London, England.

With the rising wave of protectionism, there are more and more “angry societies” as countries increasingly look inward.

Therefore investors need to consider such major trends when making long term decisions, said Michael Strobaek, global chief investment officer at Credit Suisse.

Otherwise, they might be spending too much time focusing on the daily grind — technicalities such as the ups and downs of the S&P 500 stock index, bond yield curves, and what the Fed thinks, he said.

“I do believe that you need to think — certainly if you are a long term buy and hold investor — you need to think long term and try and turn off the screens … watch what’s going to happen in this world,” Strobaek said Wednesday at the Credit Suisse Asian Investment Conference in Hong Kong. It’s crucial that investors think hard about broader developments he called “super trends.”

Among those “super trends” that the investment bank has identified are increasingly “angry societies” illustrated by phenomena such as the rise of U.S. President Donald Trump’s “America First” thinking and Brexit in Britain.

“For us, angry societies means there are ruptures in the liberal democratic model that we all have grown up to believe is the only real surviving model of all,” Strobaek said.

“We are living through a time and period whereby democracies are undergoing fundamental challenges and changes,” he added. “And what it means is that … countries will begin focusing themselves on themselves.”

While Strobaek was quick to stress that he does not advocate any investments that “have a bad or mean purpose for people and societies,” it’s undeniable that countries will be looking to protect themselves, he said.

That means companies involved in security, defense and cyber security are likely set to grow, he said.

Citing terrorist attacks in Europe as one factor, Strobaek said “there is a substantial need for further spending on defense and security.”

“Investment opportunities in this space, I think, for the next five to 10 years are going to explode in potential,” he concluded.

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