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Market Factors: For investors, 'The impossible has become commonplace'

  //stocks-investing.news-articles.net/content/202 .. stors-the-impossible-has-become-commonplace.html
  Published in Stocks and Investing on Monday, October 20th 2025 at 20:02 GMT by The Globe and Mail
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Market factors for investors: The impossible has become commonplace

The Globe & Mail’s recent analysis, “Market factors for investors: The impossible has become commonplace,” paints a portrait of today’s financial landscape as one where the previously unthinkable—once relegated to speculative headlines—has seeped into the daily fabric of investing. By weaving together macroeconomic data, geopolitical developments, and the rise of disruptive technologies, the article argues that investors must recalibrate their expectations and strategies to survive and thrive amid an era defined by paradoxes and rapid change.

1. The Low‑Rate, High‑Growth Paradox

A central theme is the continued dissonance between interest rates and corporate earnings. The article notes that the U.S. Federal Reserve and other central banks have maintained near‑zero or negative policy rates since the pandemic, yet corporate profit margins, particularly in high‑growth tech and biotech sectors, have expanded at unprecedented rates. This divergence creates an environment where “high valuations” can coexist with “low yields,” a scenario that once seemed unsustainable. Analysts cited in the piece suggest that this mismatch is being driven by a combination of relentless innovation, sustained consumer demand for digital services, and an enduring appetite for risk among equity investors.

2. Inflation, Energy, and the Energy Transition

Inflationary pressures have surged, largely due to supply‑chain bottlenecks and a rebound in consumer spending. The Globe & Mail links this to the spike in energy prices, noting that oil and gas markets have experienced volatility that reverberates across the entire economy. The article introduces the concept of the “energy transition” as both a risk and an opportunity: while traditional fossil‑fuel assets face declining demand, renewable‑energy and battery‑storage companies are positioned to benefit from the long‑term shift. The piece references reports from the International Energy Agency (IEA) and BloombergNEF that project a doubling of renewable capacity by 2030, underscoring the need for investors to reassess exposure to both legacy and emerging energy assets.

3. Geopolitical Tensions and Market Volatility

The analysis underscores the increasing influence of geopolitical events on market sentiment. Recent tensions between the United States and China, escalating sanctions on Russia, and the resurgence of regional conflicts in Eastern Europe are highlighted as catalysts for heightened uncertainty. The article cites data from the Institute for Economics and Peace, which measures “risk‑adjusted market volatility” and finds a clear correlation between geopolitical risk indices and swings in equity prices. Investors, the piece warns, should be wary of concentrated exposure to any single geopolitical region and consider diversification strategies that include sovereign bonds and global ETFs.

4. ESG, Climate, and the Reconfiguration of Risk

ESG (environmental, social, and governance) considerations are no longer niche. According to the Globe & Mail, regulatory frameworks in the European Union and the United States are tightening, mandating greater disclosure of carbon footprints and human‑rights compliance. The article references a report by the World Economic Forum that highlights how climate‑related risks are shifting asset valuations, with companies in the low‑carbon transition scoring higher on credit spreads. It emphasizes that investors must integrate climate risk modeling into their due diligence processes, especially for industries with high carbon intensity such as mining and heavy manufacturing.

5. Digital Assets, AI, and the New Frontier

The article dedicates a substantial portion to the emergence of digital assets and artificial intelligence. It explains how Bitcoin and other cryptocurrencies have moved from fringe speculation to institutional interest, citing the growing number of pension funds and asset managers allocating small fractions of their portfolios to digital holdings. The piece references a recent survey by the Bank for International Settlements (BIS) that found 23% of major financial institutions now hold some form of crypto exposure. Meanwhile, AI technology is described as a “growth engine” that is reshaping entire industries—from autonomous vehicles to precision medicine. The Globe & Mail cites an MIT report estimating that AI could contribute up to 7% of global GDP by 2030, urging investors to factor this into long‑term allocation models.

6. Emerging Markets: Growth vs. Instability

While developed markets grapple with low rates and inflation, emerging economies offer a contrasting narrative of rapid growth coupled with political instability. The article highlights countries such as India, Brazil, and Vietnam as hubs of expanding middle classes, yet cautions against overexposure due to currency volatility and regulatory unpredictability. Data from the International Monetary Fund (IMF) is used to illustrate that emerging markets have delivered double‑digit growth rates in the past five years, but the risk‑adjusted return remains a pressing concern.

7. Practical Takeaways for Portfolio Construction

The piece concludes with actionable insights for investors:

1. Diversify Geographically and Across Asset Classes – Mitigate concentration risk by incorporating international equities, fixed income, and alternative assets such as real estate and commodities.
2. Embed ESG into Core Investment Decisions – Use ESG scores not just for ethical alignment but as a predictive tool for risk and resilience.
3. Allocate a Modest Digital Asset Position – Consider a 1–3% allocation to cryptocurrencies as a hedge against inflation and as a speculative play.
4. Leverage AI‑Driven Analytics – Employ machine learning models to refine asset selection, risk forecasting, and portfolio optimization.
5. Maintain Flexibility Amid Geopolitical Shocks – Use liquid instruments such as ETFs and futures to quickly rebalance in response to market turbulence.

8. The New Normal

In closing, the Globe & Mail frames today’s investing environment as one where “impossible” scenarios—such as high valuations in a low‑rate world, or the coexistence of booming digital assets and severe geopolitical risk—are not anomalies but emerging norms. The article invites investors to adopt a holistic, forward‑looking approach that recognizes the interconnectedness of macro trends, technological disruption, and regulatory evolution. By doing so, they can position themselves to navigate the paradoxes of the present and capitalize on the opportunities that lie ahead.