‘You pray for rain, you gotta deal with the mud too. That’s a part of it’ – Denzel Washington

You can buy Donald Trump’s book ‘The Art of the Deal’ online for the equivalent of a couple of cups of coffee. In terms of what he writes you can get the gist by looking at some of the publisher’s blurb which includes the wonderful observation that:

‘He isolates the common elements in his greatest accomplishments; he shatters myths; he names names, spells out the zeros, and fully reveals the deal-maker’s art.’

Of course you can save your money and just watch the day-to-day events in the world’s trade and diplomatic markets for a realtime crash course. You can see the reactions to the news about the steel and aluminium tariffs, from a meeting of the G7 finance ministers in Canada over the weekend, where the French foreign minister labelling the US’s actions as “unjustifiable” and the Canadian prime minister said the move was “insulting and unacceptable”. Should be a fun full G7 meeting in Quebec later this week…

In life, politics or when thinking about the investment markets it is not what you say, it is what you do that matters…and this thought particularly applies to the now US President Trump. The underlying reality is that the world is changing and progressively America’s position of pre-eminence is being challenged by China. We should therefore not be too surprised that this has manifested itself into more mercantilist instincts. The trouble is despite America’s accumulated wealth and political weight, fiscally it remains materially dependent on foreign bond holders and the broader global economic system. Deep down President Trump knows this and is therefore playing his hand – to invert an historic political saying – by talking loudly whilst in reality carrying a small stick. Such a reality will limit his potential to materially menace markets longer term…but maybe not in getting a better deal today.

Trade disruptions and retaliations are very rarely in anyone’s longer-term interests but – as any game theory student will attest – a credibly firm negotiating position can give a country better payoffs. And it is the formation of these credibly firm negotiating positions that you are still seeing at the moment. In a financially interlinked world, calm heads and cool analysis usually win out…and this keeps me hopeful. However all of this is also happening at a time of mixed value in the world’s financial markets where obvious and clear value across equity, fixed income and/or property markets is not clear. This is why a careful picking and choosing of individual investments – which is at the heart of the Global Dynamic Opportunities Fund – remains a valid strategy for today. And it becomes more valid the more excitable the headlines get.