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2 minutes to read by  Mike Bell, CFA Jun 1, 2026

Political and economic shocks are becoming more frequent. Mike Bell, Head of Market Strategy explains why and the portfolio implications.

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It’s time to stop being shocked by shocks. After all, we are now 10 years into an era of successive shocks. Brexit, Trump, Tariffs 1.0, Russia’s invasion of Ukraine, the Truss UK gilt crisis, food price spikes, Trump (again), Liberation Day, the software sell off and now Iran and yet more political upheaval in the UK. Rather than a bevy of black swans, these shocks represent something more structural.

Key points:

  • What’s changed? Structural forces are leading to more frequent political and economic shocks.

  • The causes: Several fault lines are leading to frequent shocks – from globalisation and automation to inequality and climate change.

  • Investment implications: Flexible absolute return strategies and active management of relative equity and duration positions within traditional balanced portfolios can potentially help buffer portfolios. This approach offers the potential for strong risk-adjusted returns, while aiming to provide some protection against both fixed income and equity market volatility.

The causes

Domestic

  1. Globalisation and immigration

  2. Innovation and automation

  3. Inequality and house prices

  4. Debt and demographics

International

  1. Forever war and free loading fatigue

  2. Nationalism and national security

Environmental

  1. Climate change

Get the latest insights from RBC Global Asset Management.

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