By Margaret Franklin, CFA

In our interconnected world, geopolitical events — ranging from trade disputes and regulatory shifts to conflicts and pandemics — capture headlines and influence market sentiments.

As investment professionals, it’s crucial for us to understand these dynamics without losing sight of long-term client objectives.

At CFA Institute, our role is clear: we educate financial professionals. We do not take positions on geopolitical matters. Rather, we focus our work through the lens of investment outcomes and improving the financial system for the benefit of all market participants.

Since our founding in 1947 — the post–World War II era — every decade has been marked by significant strife and economic disruption. The Cold War defined geopolitics for decades. Borders shifted in Eastern Europe and were drawn and redrawn over time. The 1960s brought massive cultural and governmental changes to many parts of the world. The 1970s saw significant inflation, high interest rates, and oil-supply shocks.

I could go on, but the point should be clear: every epoch poses unique sets of challenges for investors. As financial professionals, we must serve client needs and remain focused on our mandate to improve investor outcomes. We must not allow news alerts or our own personal views on the issues of the day to distract us from the work of fundamental analysis and our fiduciary duty to clients. And at CFA Institute, we must focus on our mission:

“To lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society.”

Recognizing the significance of geopolitical factors, the CFA® Program curriculum contains comprehensive content on this subject. In Level I, candidates explore the “Introduction to Geopolitics,” which examines how geography influences politics and international relations, and how these, in turn, impact global economies and investment markets. This content is also available to our members as a refresher reading.

We don’t “teach” positions on these matters. We focus on the core: what does it mean for investors? This inclusion of geopolitics in the curriculum underscores our commitment to equipping members and candidates with the tools to assess and navigate geopolitical risks effectively.

The writer leads the CFA Institute
The article was first published on the CFA website: https://blogs.cfainstitute.org