UBS: A century of data proves that economic fundamentals are the core driver of the market.

UBS analysts noted in a report that data since 1900 shows that economic risk has proven more significant than geopolitical risk for financial markets. They stated that, in most cases, investors who can "see through" geopolitical noise perform best. The analysts said, "Through a simple regression analysis of future global stock returns and the geopolitical threat index, we found no correlation between the two, whether viewed from a monthly or yearly perspective." However, geopolitical risk is clearly crucial in the event of "extreme events with significant economic impact," citing World War I, World War II, and the 1973-1974 oil crisis as examples. But they pointed out that such events are "relatively rare," and historically, economic risk has always been more important to investors. (Jinshi)