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Investing in Europe: Proceed With Caution

Investors should be aware of the potential implications of further political upheaval, says Morningstar Investment Management's Dan Kemp.

In Europe, the rise of nationalism has been curiously tolerated, as equity markets rallied 5% in both the U.K. and Europe in December. This came despite growing anxieties regarding the implications of a "Hard Brexit" as well as decisive results in the Austrian election and Italian constitutional referendum.

If Brexit and the U.S. presidential elections have taught us anything, the public are cynical of the status quo and are willing to express this discontent with their votes. This is a key risk to the European Union as we approach the French elections in first half of 2017 and the German elections in the second half.

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