Major physical shocks (e.g., war, labor disruption) cause global assets to co-move indiscriminately, ignoring country-specific fundamentals. This creates opportunities for dispersion trades by identifying geographical discrepancies where assets are mispriced relative to their actual exposure to the shock.

Unlike previous years dominated by a single theme, 2026 will require a more nuanced approach. Performance will be driven by a range of factors including country-specific fiscal dynamics, the end of rate-cutting cycles, election outcomes, and beneficiaries of AI capex. Investors must move from a single macro view to a multi-factor differentiation strategy.

For global expansion, view countries as having unique attributes like players on a sports team. Outsized returns come from matching your business to a country's inherent 'raw material' strengths—such as leveraging the US for its market liquidity, or Australia for its abundant land and sun for solar projects.

Countries like Poland, which transitioned to capitalism relatively recently, are under-followed by global investors. This creates opportunities to find "boring compounder" stocks, such as supermarket chain Dino Polska, at attractive valuations. These businesses are often run by outsider CEOs and are insulated from global hype cycles like AI.

During periods of country-specific fear or uncertainty, investors sell off all assets indiscriminately. High-quality companies are discarded along with low-quality ones, making country-level risk analysis more critical for investors than sector or individual company analysis.

Latin American economies are positioned to benefit from the Iran conflict. The region is not only geographically removed from the turmoil but also features large commodity exporters that gain from price increases. Furthermore, a political realignment with the U.S. is enhancing its strategic and economic appeal for investors.

As the world splits into economic spheres, the investment thesis shifts from simply selling the US to buying the entire Americas. Latin America offers advantages like resource wealth, educated populations, and proximity to the US, making it a key growth area for the next decade.

Three concurrent forces—shifting global supply chains, peaking interest rates, and pro-investment political shifts—are creating a rare CAPEX-led growth cycle in Latin America, moving it beyond its traditional consumer-driven model.

As the world de-globalizes and countries become more economically isolated, correlations between international stock markets decrease. This falling correlation makes global diversification more powerful and essential for investors, not less, as was the case in the 1970s.