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Rethinking Returns: Managing Risks Amid Geopolitical and Economic Shifts

Invesco sees a “range of potential economic and capital market” risks that need management.

By Erik Sherman | April 04, 2025 at 05:02 AM

The world of investing is undergoing profound transformations, shaped by shifting global dynamics and evolving economic realities. While the fundamental principles of investing remain steadfast, Invesco argues that the forces driving change, such as demographic shifts, climate change, a reordering of global power structures, and the end of an era of zero interest rates—are undeniable. These trends demand thoughtful strategies to navigate uncertainty and capitalize on emerging opportunities.

Yet, some questions defy easy answers. Invesco highlights five critical areas where the future remains murky: the influence of geopolitics on growth and inflation, the emergence of new “normal” levels for inflation and interest rates, the potential impact of a changing world order on capital flows, evolving long-term return expectations, and the transformative role of technology in real estate. These are not challenges with quick fixes but instead require a recalibration of long-term asset and portfolio strategies to manage risks across multiple economic and market scenarios.

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