The race to become the next president of France is very close with polls suggesting four candidates are within touching distance of qualifying for the second round.
As we approach the first round of voting in the French presidential election, which takes place on Sunday 23 April, the race is getting closer with the latest polls suggesting four candidates are within reach of qualifying for the second round on 7 May.
We do not believe politics is a long-term driver of investment returns. Large economies are like supertankers whose direction does not change easily. We see economic growth being driven by factors like the growth of the labour force, education, technological change and global economic developments. Likewise, we believe stock returns are driven by long-run economic and financial factors. This does not necessarily mean we are in for a smooth ride. Markets often react to political events and create short term noise. If volatility were to increase, Coutts would be looking to take advantage of attractively priced opportunities if they align with our core investment principles such as seeking hidden value in investments and diversification within portfolios.
Ultimately we can not be sure, but history tells us that during periods of political change there is no discernible long term impact on the health of major economies. We believe the fundamentals in Europe remain robust and Coutts continues to have conviction in European equities. We see valuations as favourable compared to other developed markets and the outlook for earnings growth attractive.
We recently asked a range of our clients on their views and by far the majority expected the EU to still be intact in five years time. The outcome is incredibly difficult to predict but whatever the result, Coutts believes that focusing on our core investment principles, centred on a well diversified portfolio of assets and being patient, will serve investors well over the long term.
21 April: Poll blackout period begins
23 April: First round. Exit polls at 7pm BST
7 May: Second round between the two finalists. Exit polls at 7pm BST
11 and 18 June: First and second rounds of parliamentary elections to renew 577 seats in the lower house
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