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Sheryl Sutherland notes that when the world's movers and shakers meet to talk about economic issues, it reinforces the need for investors to take a long term approach to their decisions

Investing / opinion
Sheryl Sutherland notes that when the world's movers and shakers meet to talk about economic issues, it reinforces the need for investors to take a long term approach to their decisions
Davos, Switzerland

By Sheryl Sutherland*

"The single greatest edge an investor can have is a long-term orientation." ~ Seth Klarman

"Davos" I hear you say? Davos is a city set in the freezing alps of Switzerland. In January it hosted the 54th annual meeting of the World Economic Forum. It has been claimed as "elitist and expensive" by Reuters and "boring" by Stephen Pinker (the cognitive psychologist who was part of a panel).

I'm going with "boring, but important to you and me." Important because this is where the rich, powerful and brainiacs of the world meet. A summary of their views is therefore useful when considering how and where we invest.

I'll summarise some key points for you so you don't have to read the screeds of writing that this gathering engendered. Some of the points are self-­evident, but are worth repeating all the same.

In no particular order:

  • A record number of women attended.
  • Considerable discussion on the concept of the consolidation of the European Bank; with nothing of worth arising because intra-borders are not viable "without uniform regulation across the region".
  • Decarbonisaton discussions continue with no end in sight to peak oil. Interestingly, fewer energy executives attended Davos this year, although bosses from Shell, Aramco and Total Energies met "to discuss how to help decarbonise the industries that supply."
  • Switzerland agreed to host peace talks (after meeting with over 80 national security advisors) in relation to the war the industries in Ukraine. Zelensky also met with bank leaders such as JP Morgan's boss, Jamie Dimon.
  • Al was a hot topic, covering issues such as concerns over security, scientific discovery, how it should be regulated, and more importantly, how it could be monetised.
  • The old chestnut of global economic recovery reared it's head. Pretty much everything concerned the global bank chiefs, inflationary pressures, rising oil costs, geopolitical risks affecting shipping, and the results of many of the elections occurring in 2024.
  • Something that relates to us as individuals is debt restructuring. Argentina and Ghana were among the debt-ridden countries to discuss their debt restructuring plans.
  • The Red Sea remains an area of concern. China's premier - Li Qiang - declared China as open for business. Reuters reported that investors remained cautious, given the US/China tensions and China's less than stellar post-pandemic recovery. Notes of optimism regarding India's future economic growth were sounded.
  • The agenda was dominated by events in the Middle East, but no progress was made on the creation of a Palestinian state or a ceasefire in the Israel/Hamas war. The head of the Palestine Investment Fund said that at least $15 billion would be needed to rebuild Gaza's housing infrastructure, but there was no inclination to assist until a lasting peace could be negotiated.

So where, as an individual investor, does this leave you? Again I repeat, consider the long-term. Issues like these have been echoed across centuries and countries. Investing against such a backdrop of gloom and despondency is not easy. Consider however, the next ten years when making your decisions against today's backdrop.

*Sheryl Sutherland is director of The Financial Strategies Group, and author of Girls Just Want to Have Fund$ – Every Women’s Guide to Financial Independence, Money, Money, Money Ain’t it Funny – How to Wire your Brain for Wealth, and co-author of Smart Money – How to structure your New Zealand business or investments and pay less tax. You can contact her here.

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