A macro hedge fund index compiled by Hedge Fund Research is down nearly 1 percent since Jan. 1<br />and over 4 percent for the last 12 months, one of the worst performing hedge fund indexes.<br />If you think politics is roiling United States markets, consider Brazil: The day after the Trump-induced turmoil on United States exchanges, the Brazilian market fell 10 percent<br />and trading had to be halted after news of a bribery scandal engulfed its relatively new president, Michel Temer.<br />Of 11 major geopolitical events examined by Mr. Stack’s firm, only two — the Nazi invasion of France in May 1940,<br />and Japan’s bombing of Pearl Harbor in December 1941 — led to market losses over one-week, three-month and one-year periods (and in the case of Pearl Harbor, the one-year decline was less than 1 percent).<br />Paulson & Company and Soros Fund Management, two of the best-known global macro hedge funds, which make bets on geopolitical<br />events, lost billions last year according to an annual hedge fund ranking compiled by LCH Investments.<br />“Historically speaking, and as a seasoned investor, I’d say investors should just<br />ignore geopolitical events like Brexit or whatever is happening in Brazil.”<br />The problem, Mr. Stack’s research has found, is that “geopolitical events may be widely feared,<br />and there will often be a knee-jerk market reaction when they’re unexpected, but seldom do they have a lasting impact.<br />Politics May Move the Market, but Rarely for Long -<br />The United States stock market shuddered last week on a report that President Trump had tried to stop an F. B.I.
