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The French Conundrum: An Investor Opportunity?

Similar events like Brexit and Trump's election turned out very well for bulls.

As French voters return to the polls May 7th to cast their second and final vote for president, the result is likely to have far reaching implications on the global economy, currency trading and the Forex markets.

Favorite-to-win is Socialist Emmanuel Macron who most view as the best choice for the markets because of his position to maintain the economy as a Euro Zone participant. His pro-EU stance is viewed as the most popular choice and polls show him ahead with a fairly comfortable margin. Macron is calling for Germany to reflate its economy, which would boost French exports, and for a Eurozone Parliament and Finance Minister to manage the EU budget.

In close second is Marine Le Pen, an “extreme” right member of the National Front party who has voiced support for a two currency system based on the Euro for international trading and the French franc for everyday use. Further complicating Le Pen’s platform is her lack of commitment to remaining part of the Euro Zone at a time when polls report that 70% of the French people favor sticking with the Euro Zone’s single currency system.

Throughout history, France’s economy has been significant in terms of its economic and political influence. The leader it selects will therefore have a strong impact on world events and, in particular, the Euro. Will it weaken or gain strength in the months ahead? We saw a surge in the value of the Euro after the primary election event, so one would expect that the victory of Macron is baked in to the current value of the Euro. But what happens to that currency in the short term should he lose, and what happens to the currency overall, should France decide to move to a single (franc) or two currency system?

While that question remains unclear at this juncture, it is a fact that the French economy hasn’t kept pace with Germany. While historically the two countries have remained “even” in terms of the standard of living, Germany is a clear leader today with lower unemployment and a stronger economy. With all of this in mind, investors around the world are paying attention to the election as a bellwether of what is to come and are wondering how it will all jive with the added volatility of events such as Brexit and President Trump’s election based on reinvigorated Populism.

If there’s one thing we have learned over time, it is that when there is volatility there is also opportunity. One key is to identify, vet and invest with top tier managers who know how to use volatility to their advantage. Another key is to consider emerging, smaller managers who are typically more nimble and well-positioned to make fast decisions based on global events as they unfold. Studies show that these smaller managers often outperform larger managers time and time again. When evaluating managers, investors should insist on audited numbers, a strong management team, transparency, liquidity and strong risk systems.

In today’s era of advanced technology, the opportunity to invest with managers such as Mediatrix Capital who utilize advanced algorithms and artificial intelligence to trade high yielding niches in the gold, silver and currency spot markets is compelling. As of May 2017, Mediatrix has achieved 41 straight months of client gains, from December 2013 to the present date. This success is possible as a result of the systems’ ability to manage downside trading risk, the functionality of the technology and the management team’s many years of experience navigating market volatility.

For further information on how Mediatrix Capital helps investors navigate global market volatility, visit www.mediatrixcapital.com or call 1-800-905-1006.

Disclaimer
In no event should the content of this material be construed as an advertisement, express or an implied promise, guarantee or implication by or from Mediatrix Capital Inc. (MC) or any of its partner or subsidiary companies. This is not an attempt to sell or solicit any security and should not be taken as such. The content of this document is for informational purposes only. Potential Accredited Investors are advised to carefully read the Disclosure Documents to determine whether a managed investment in MC is consistent with their financial situations and investment objectives. Past results are no guarantee of future performance. Mediatrix Capital is a foreign corporation based in Nassau Bahamas, and does not operate within the United States.