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The acceleration of technological innovations and the challenges associated with adapting to them seem to point toward a tumultuous future. That future appears to be approaching faster than ever. Companies are finding it harder to maintain their positions in industries that are increasingly subject to disruption. And while investors may not be able to pinpoint precisely which companies or industries will lead the disruption—or fall victim to it—they should do what they can to plan to take advantage of these opportunities when they arise.

While currency traders were fixated throughout 2016 on the U.S. Federal Reserve’s outlook for short-term rates, we expect that changes in the value of the U.S. dollar in 2017 will be driven more by geopolitical events: most notably, the French Presidential election, a potential national election in Italy, as well as U.S.-China relations. In this edition of Global Foresight, we look across geographies, beginning with a focus on European politics and then a review of Japanese valuations. Jimmy Chang follows with an article on the U.S., China and emerging markets.

While the financial markets have moved well beyond the Global Financial Crisis of 2008, the public trust of a very large sector of the global economy is still severely marred due to continued bad behavior, lack of corporate transparency, accountability and proper risk management, as well as risky business practices. To overcome these shortcomings, the global investment community took on the role of “active stewardship” in capital markets.

The swishing of the President’s pen on paper to sign protectionist measures into law or executive orders could unwittingly cause a financial storm. So far, investors seemed to have shrugged off the risk of protectionism. Markets also do not seem to expect the proposed border adjusted tax to get enough support in the Senate. However, policy uncertainties over trade, tax code, Obamacare replacement, and even immigration issues could start to weigh on business sentiment and decision making.

Looking at the outlook of the major asset classes, there is potential for a break in the clouds. But overall, the things we have been worried about for some time—high valuations for certain risk assets, record-low interest rates, slow economic growth—have not gone away. We remain concerned that investors are stuck in a low-return world where they will struggle to earn 5% in real terms. As we look across asset classes, we see moderate to expensive valuations, solid but not spectacular fundamentals, and wildcards such as geopolitical shocks.

Over time, and as more investors allocate capital to private equity, the market has evolved to become increasingly sophisticated and competitive. As a result, there has been an expansion of investment scope and a profusion of specialized sub-strategies (for example, co-investing, direct investing, sector-focused strategies) and managers expanding into geographies, sectors, and/or asset classes that may be new to them and their investors. In this context, fund-level net to LP benchmarks, while still necessary, are not always sufficient to evaluate performance.

Investing in a changing world can be challenging. Looking at the current environment, there is a wide array of possible outcomes due to heightened political uncertainty in Europe related to a number of key elections in the region and policy upheavals at home. These changes carry the potential to disrupt and dislocate markets. To this end, investors should be prepared to act quickly—as they did in early 2016—to exploit this volatility. It then becomes vital to identify the major themes driving change.

Last year, the Hong Kong government established two sovereign funds to stimulate private investments and increase deal flow in local Hong Kong technology start-ups. Given the intense competition for good opportunities, high quality assets and the great responsibility that these funds hold in their hands, there has been greater transparency and recognition for more overt accountability and governance. Looking at it from the professional investor viewpoint, it becomes clear the onus is on the investor to prove that it is the right partner—responsible, professional and able to add value.

Economic and demographic strengths have combined to make India the world’s fastest growing major economy for three years running. In 2016-2017, the country’s GDP, ranked seventh globally the year before, is projected to grow by 6.6%. India’s prime minister, Narendra Modi, embodies a “can do” spirit and champions a pro-business environment.

The 5th edition of the Social Divide index reveals that FTSE 100 companies are sharing more and better financial results-related posts on social media, assembling the right mix of social ingredients to achieve significantly higher levels of engagement than ever before. Indeed, in a clear indication of increasing stakeholder appetite for receiving results-related communication via social media channels, there was a 105% increase in interactions with results content in comparison to 2015.