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Geopolitical risk is at a nearly three-year high — here’s why that’s not a reason to sell stocks

January 9, 2018

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Despite some concerns about valuation, the global economy looks strong enough that one of the biggest risks facing stocks in 2018 may not actually be something to fear.

Geopolitical issues are widely considered one of the biggest potential headwinds facing markets in the new year. In addition to ongoing tensions between the U.S. and North Korea, the investigation currently being conducted by special counsel Robert Mueller has been cited as a factor that could lead to volatility. Political issues are seen as harder to predict than the economic factors that drive market action, and, because of this, the sudden emergence of such an issue can have a pronounced impact on trading, at least in the short term.

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