Fisher Investments Press: Own the World: Political Risk

Political risks exist everywhere. In most developed countries, Fisher Investments feels the main risk associated with politics is the potential for dramatic legislative change. Often, big legislative changes can mean transferring wealth or power from one group of people and handing them to another. They can also mean creating more onerous regulations or putting governments in control of functions that could be handled more efficiently by free markets. Fisher Investments believes any of these can cause concern among investors. But these risks are as prevalent in the US as just about anywhere else, so investing outside the US can actually reduce political risk when the winds of political change are blustery here. Still, the often incorrect perception is foreign governments are unstable. Political turnover happens at very regular intervals in the US. We have presidential elections every four years. Senators are elected for six-year terms, with elections occurring every two years. Members of the House of Representatives are elected for two-year terms, so their elections line up with those for the Senate and the White House. You can set your watch (make that calendar) by the US election cycle.